be implemented even if the supervisor's preferences are unknown. The corresponding optimal contract is similar to what we …

relational contract could establish cooperation through peer monitoring even under relative performance evaluation, which …

rents, reducing his incentives to exert effort. The optimal contract controls information rents to improve incentives by … reflects the agent's private ability, a simple equity contract is optimal …

cost. The robust contract generates a seemingly excessive pay-performance sensitivity. The worst-case effort cost is high … contract is misspecified, i.e., when he is offered the robust contract, but his true effort cost is constant. I find that …

principal is ambiguity averse, and designs a contract which is robust to the worst case effort cost process. Ambiguity divides … the contract into two regions. After sufficiently high performance, the agent reaches the over-compensation region, where … he receives excessive benefits compared to the contract without ambiguity, while after low performance, he enters the …

In this paper, we show that whenever the agent's outside option is nonzero, the optimal contract in the continuous …. The agent is then asked to resume effort, and the contract continues. We show that a nonzero agent's outside option arises …

cost minimization problem of the principal, the objective of which is to design the cheapest contract inducing a target … effort. Our results confirm that a one-step bonus contract should be used, which means that a bonus contract is most …