This paper analyzes choice-theoretic costly enforcement in an intertemporal contracting model with a differentially informed investor and entrepreneur. An intertemporal contract is modeled as a mechanism is which there is limited commitment to payment and enforcement decisions. The goal of the...

The Axiom of Monotonicity (AM) is a necessary condition for a number of expected utility representations, including those obtained by de Finetti (1930), von Neumann and Morgenstern (1944), Savage (1954), and Anscombe and Auman (1963). The paper reports on experiments that directly test AM by...