A standard tournament contract specifies only tournament prizes. If agents' performance is measured on a cardinal scale, the principal can complement the tournament contract by a gap which defines the minimum distance by which the best performing agent must beat the second best to receive the...

The existing delegation literature has focused on different preferences of principal and agent concerning project selection, which makes delegating authority costly for the principal. This paper shows that delegation has a cost even when the preferences of principal and agent are exogenously...

We examine the implementation of efficient decisions about accepting a special order with asymmetric information by means of a dual transfer pricing mechanism based on Ronen and McKinney (1970). The model is designed in a simple fashion, two vertically related divisions within a firm...