We study theoretically and empirically the relation between altruism preferences and incentive contract design. Theoretically, we extend Fischer and Huddart (2008) to investigate how social norms reinforce altruism preferences, thus affecting the optimal contract design related to incentive...

This paper examines a potential problem associated with the use of subjectivity in incentive contracts: Relational contracting clarity. Clarity refers to the extent to which the terms of a relational contract, or subjective assessment can be communicated and an employee and his superior are able...

We consider a single-principal/multi-agent model to investigate the principal's preferences over delegated contracting. The analysis extends the single-agent/multi-task LEN model in Feltham and Xie (1994) to a multi-agent/multi-task context. We consider full-commitment contracts, i.e., the...

Given a standard moral hazard problem, the agent's optimal compensation can be cast as a function of either (i) the gross outcome, or (ii) the net outcome, which is the gross outcome net of the agent's compensation. Contracts based on the net outcome are important in practice because (i)...