We study a model of informed principal with private values where the principal is risk neutral and the agent is risk averse. We show that the principal, regardless of her type, gains by not revealing her type to the agent through the contract offer. The equilibrium allocation transfers some...

Suppliers often make proactive investments in capacity to strategically position themselves to win a contract with a monopolist buyer. Such investments reduce the suppliers' variable costs of serving the buyer's demand. We show that an auction mechanism does not always benefit the...

We modelize and investigate the analytical rationale of employing bilateral mechanism design, which simplifies collective mechanism design by ignoring relative information evaluation, in generalized multi-agency contracting games under Bayesian Nash equilibrium. We permit interdependent...

Blockchain implementations of auctions have to deal with the problem of front-running: block production happens at discrete intervals, and anyone can inspect and react to the incoming bids before they are written on chain. The presence of smart contracts among bidders, a hallmark of automated...

Optimal contracts between a buyer and a seller who trade multiple goods under asymmetric information are considered. The seller makes sequences of unobservable investments, and then realizes the value of the goods. The investment level and value of goods are private information for the seller...

We consider the problem of a principal who wishes to contract with a privately informed agent and is not able to commit to not renegotiating any mechanism. That is, we allow the principal, after observing the outcome of a mechanism to renegotiate the resulting contract without cost by proposing...

We introduce the SPRIG (Smart Proofs via Recursive Information Gathering) protocol. SPRIG allows agents to propose, question, and defend mathematical proofs in a decentralized fashion. A structure of stakes and bounties aims at producing debates in good faith and if those persist, they must go...

Inter-firm R&D collaborations through contractual arrangements have become increasingly popular, but in many cases they are broken up without any joint discovery. We provide a rationale for the breakup date in R&D collaboration agreements. More specifically, we consider a research consortium...

Consider a three-tier industry with a monopolist supplying an essential input to a manufacturer, which in turn sells its product to final consumers through two differentiated retailers. Throughout the supply chain, contracts are linear and secret. In this setting, upon receiving an...

A central insight of agency theory is that when a principal offers a contract to a privately informed agent, the principal trades off ex post efficiency in the bad state of nature against a larger profit in the good state of nature. We report about an experiment with 508 participants designed to...