period, receives a constant efficiency wage and no feedback until he is fired. The optimal contract for a finite horizon is … contract when delta << 1 is partially characterized. Incentives are optimally provided with a combination of efficiency wages …

of enforceability that inhibits an agent's ability to renege on the contract and a level of auditing that inhibits his … ability to conceal income. The dynamics of the optimal contract imply an endogenous lower bound on the lifetime utility and … consumption of an agent, strictly positive auditing at all points in the contract and positive enforcement only when the agent …

agent. Monitoring ensures effort but is costly to the principal. The optimal contract involves monetary payments and …

contract renegotiation is a powerful tool for incentive provision, despite the stationarity of the environment. Continuation …

We consider the problem of a principal who wishes to contract with a privately informed agent and is not able to commit … renegotiate the resulting contract without cost by proposing a new mechanism any number of times. We provide a general …

We examine a model of contracting where parties interact repeatedly and can contract at any point in time, but writing … enforceable contracts is costly. A contract can describe contingencies and actions at a more or less detailed level, and the cost … of writing a contract is proportional to the amount of detail. We consider both formal (externally enforced) and informal …

A central insight of agency theory is that when a principal offers a contract to a privately informed agent, the … report about an experiment with 508 participants designed to test whether this fundamental trade-off is actually relevant. In … particular, we investigate settings with both exogenous and endogenous information structures. We find that theory is indeed a …

engaging in the activity causes others to offer larger rewards. Our theory yields the testable prediction that such effects are …