Chakravarty, Surajeet; Makris, Miltiadis - In: Journal of Institutional and Theoretical Economics (JITE) 168 (2012) 4, pp. 687-711
We attempt to shed some light on the problem of providing incentives to service providers such as teachers and doctors. Often, outcomes of such services are not verifiable, and this has been cited as a reason for lack of incentive provision. We derive the contract offered by a principal if, in...