I study the trade-off between private and verifiable interim performance evaluations under uncertainty. More uncertainty leads to higher agency costs if the interim evaluation is public and verifiable but lower agency costs if the interim evaluation is private and unverifiable.

I consider a situation, where the agent can acquire payoff-relevant information either before or after the contract is signed. To raise efficiency, the principal might solicit information; to retain all surplus, however, she must prevent precontractual information gathering. The following class...

Why does incentive pay often depend on subjective rather than objective performance evaluations? After all, subjective evaluations entail a credibility issue. While the most plausible explanation for this practice is lack of adequate objective measures, I argue that subjective evaluations might...

Should contract design induce an agent to conduct a precontractual investigation even though, in any case, the agent will become fully informed after the signing of the contract? This paper shows that imperfect investigations might be encouraged. The result stands in contrast to previous...

A monopolistic seller possesses an inventory containing distinct products, each consumer wishes to buy a single product, and the seller can steer consumers’ choices. We fully characterize the producer-consumer surplus pairs induced by market segmentation when the number of products is large....

I consider a situation, where the agent can acquire payoff-relevant information either before or after the contract is signed. To raise efficiency, the principal might solicit information; to retain all surplus, however, she must prevent precontractual information gathering. The following class...

The dissertation consists of three chapters. The fist two chapters use principal-agent models to analyze optimal contract design under the assumption that the contract can induce the agent to acquire relevant private information. Specifically, Chapter 1 demonstrates the use of stochastic...

We study buyer-optimal information structures under monopoly pricing. The information structure determines how well the buyer learns his valuation and affects, via the induced distribution of posterior valuations, the price charged by the seller. Motivated by the regulation of product...

We analyze how voluntary disclosure of information by bidders affects the outcome of optimally designed auctions. In a single-object auction environment, we assume that before the revenue-maximizing auctioneer designs the auction, bidders noncooperatively choose signal structures that disclose...