This paper considers a principal-agent model with adverse selection, in which collusion among the agents is possible. We compare the optimal outcome in two cases: (i) the principal can perfectly discriminate the transfers to the agents, and (ii) the principal's power to discriminate the...

We compare rigid and flexible organizations when side contracting among agents is possible. Within a rigid organization, each agent can produce only one component of the final product, whereas within a flexible organization, the agents can reallocate their tasks during the production period. In...

This paper studies interim randomization in contracting settings with multi-sided incentive problems. More specifically, we show that in a principal-agent model with auditing the principal mitigates a non-contractibility of auditing by conditioning the contract on a random signal that is...