This paper develops a positive model of informal contracting in which rewards and punishments are not determined by an ex ante optimal plan but instead express the ex post moral sentiments of the arbitrating party. We consider a subjective performance evaluation problem in which a principal can...

This paper studies a dynamic agency problem which includes limited liability, moral hazard and adverse selection. The paper develops a robust approach to dynamic contracting based on calibrating the payoffs that would have been delivered by simple benchmark contracts that are attractive but...

Medicare has sought to improve patient care through pay-for-performance (P4P) programs that better align hospitals' financial incentives with quality of service. However, the design of these policies is subject to a variety of practical and institutional constraints, such as the use of "small"...