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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 … enforcement on the structure of optimal contracts. The paper shows that simple debt is the optimal contract when commitment is …
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The paper studies inefficiencies arising in contracting between one principal and N agents when each agent's utility …
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Principal-agent models in which the agent has access to private information before a contract is signed are a … cornerstone of contract theory. We have conducted an experiment with 720 participants to explore whether the theoretical insights … the principals make contract offers, they anticipate that social preferences affect agents' behavior …
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Governments must usually take policy decisions with an imperfect knowledge of the economic actors' type or the actors' effort level. These issues are addressed within the framework of classic adverse selection or moral hazard models. I discuss in this paper how would the government’s and the...
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Should principals explain and justify their evaluations? In this paper the principal's evaluation is private information, but she can provide justification by sending a costly cheap-talk message. I show that the principal explains her evaluation to the agent if the evaluation turns out to be...
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