This paper shows that a new trade-off arises in the optimal contract when contracting takes place with vague information (objective ambiguity), reflecting that real-world contracting often takes place under imprecise information. The choice-theoretic framework captures a decision-maker`s...

This paper studies the design of financial agreements (claims, tightness of relationships) between entrepreneurs and investors, in the case where both must exert costly unobservable efforts to improve the profitability of the firm.

In diesem Bericht werden die Zwischenergebnisse der Begleitforschung 2012 bis 2013 zum Modellvorhaben LandZukunft des Bundesministeriums für Ernährung und Landwirtschaft (BMEL) vorgestellt. Das Modellvorhaben läuft von 2012 bis Ende 2014 in vier aus ursprünglich 17 Landkreisen ausgewählten...

The “mushroom treatment� is a common metaphor for the practice of “keeping employees in the dark and feeding them a steady diet of bull manure.� We develop a model of this practice of information suppression and misrepresentation within organizations,...