contract is a (secondbest) optimal screening device for firm A to screen out free-riders. With the additional constraint of … incentive to renegotiate the contract ex post. We also propose empirical strategies for identifying the three likely causes of a …

A setting of reliance investments is explored where one of the parties to a contract obtains private information … difficult task to award expectation damages corrrectly to a party with private information who sufffers from breach of contract …

We relate the design of contract law to the process of development. In this paper, contract law defines which private … levels of effort and trading among agents. The solution to this problem requires a social contract which meets two conditions …: (i) an economywide delegate (judge) responsible for the enforcement of the social contract and (ii) a set of non …

This paper derives the optimal financial contract when a borrowing entrepreneur can evade taxes in a model of costly … state verification. In contrast to previous literature on costly state verification and financial contracting, we find that … standard debt contracts are not optimal when tax evasion is possible. Instead, the optimal contract is debt-like only for very …

endowment shock is small enough, the optimal contract prevents agents from reaching autarky tomorrow and, thus, from being …

contract is collateralized when in some state, some portion of the borrower's net worth is forfeited to the lender. We show …

that hardly explains the many features of an insurance contract. We extend this setup to include the situation that the … costlessly observable, then it should be included in the contract to improve the risk sharing-incentive trade-off under moral … resulting incompleteness of the contract opens the door to controversies and disputes that may lead to judicial procedures. We …

We study optimal contracting between a firm selling a divisible good that exhibits positive externality and a group of … privately held and is unknown to the firm. By explicitly characterizing the optimal multilateral contract, we demonstrate how …