no abstract available.

We consider a repeated moral hazard problem, where both the principal and the wealth-constrained agent are risk-neutral. In each of two periods, the principal can make an investment and the agent can exert unobservable effort, leading to success or failure. Incentives in the second period act as...

This paper examines the efficiency of expectation damages as a breach remedy in a bilateral trade setting with renegotiation and relationship-specific investment by the buyer and the seller. As demonstrated by Edlin and Reichelstein (1996), no contract that specifies only a fixed quantity and a...

We study infinitely repeated two-player games with perfect monitoring and assume that each period consists of two stages: one in which the players simultaneously choose an action and one in which they can transfer money to each other. In the first part of the paper, we derive simple conditions...

This paper analyzes in a relational contracting framework when a principal should fully delegate a task to a team of hired workers or only partially delegate the task and work herself in the team. It is shown that full delegation is more likely to be optimal under a less efficient monitoring...

This paper studies infinitely repeated games with imperfect public monitoring and the possibility of monetary transfers. It is shown that all public perfect equilibrium payoffs can be implemented with a simple class of stationary equilibria that use stick-and-carrot punishments. A fast algorithm...

We study persuasion effects in experimental ultimatum games and find that Proposers' payoffs significantly increase if, along with offers, they can send messages which Responders read before deciding. Higher payoffs are driven by both lower offers and higher acceptance rates.

We study an industry in which an upstream monopolist supplies an essential input at a regulated price to several downstream firms. Legal unbundling means in our model that a downstream firm owns the upstream firm, but this upstream firm is legally independent and maximizes its own upstream...