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contracts. The setting for the demonstration is the investment hold-up model which has been the focus of much of the recent …
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In high technology areas such as biotechnology and computer software, the U.S. Patent and Trademark Office (PTO) is poorly informed about the relevant prior art. In these cases, it may be optimal for the PTO to provide incentives to the patentee to produce a complete prior art disclosure. Such...
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exogenous risk and delegation. That is, we show that only if exogenous risk is sufficiently large, the risk-neutral principal … may prefer to delegate authority over decisions to the risk-averse agent. Intuitively, for incentive reasons, the … principal may optimally want to allow the agent to reduce his risk exposure. Nevertheless, even endogenous risk may be higher …
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