A large and increasing fraction of the value of executives' compensation is accounted for by security grants. It is often argued that the optimal compensation contracts characterized in the theoretical literature can be implemented by means of stock or option grants. However, in most cases the...

The repeated agency model has been widely applied to a number of interesting and important problems in economics, though in many instances, the fact that the standard model generates transient dynamics limits the usefulness of the results obtained from the model for the simple reason that purely...

In this paper we study the problem of optimal risk sharing in a model of partnership with bilateral moral hazard and balanced budgets. In our model, there are two risk-averse agents who engage in independent productions and share the aggregate output. Each agent's production requires an effort...