I study a dynamic principal agent model in which the effort cost of the agent is unknown to the principal. The principal is ambiguity averse, and designs a contract which is robust to the worst case effort cost process. Ambiguity divides the contract into two regions. After sufficiently high...

In this paper we study the effects that loss contracts - prepayments that can be clawbacked later - have on group coordination when there is strategic uncertainty. We compare the choices made by experimental subjects in a minimum effort game. In control sessions, incentives are formulated as a...

We present a continuous-time agency model under mean-volatility joint ambiguity uncertainties, where both the principal and agent exhibit Gilboa-Schmeidler's extreme ambiguity aversion. For this, we extend the martingale method well known in the agency literature, by allowing not only the mean...

I study a continuous-time principal-agent model in which the principal is ambiguity averse about the agent's effort cost. The robust contract generates a seemingly excessive pay-performance sensitivity. The worst-case effort cost is high after good performance, but low after bad performance,...