Several recent papers have emphasized that long-term relationships can be efficiently
governed by short-term contracts, provided that there is no asymmetric information at the …

Long-term relationships are often governed by short-term contracts; this is usually explained
by referring to the costs of specifying and enforcing a complete contingent contract. We focus …

This paper studies the issue of renegotiation in a model of dynamic moral hazard. I introduce
the notion of a renegotiation-proof dynamic contract. I show that the constraint of …

Informational asymmetries can play a key role in explaining the existence and nature of
multiperiod contracts. In an illustrative risk-sharing model even relatively short (two-period) …

We study how long‐term contracts condition on a natural flow of information that reduces
asymmetric information over time. If such interim information is verifiable, optimal contracts …

This article reexamines the problem of breach of contract studied by Shavell (1980-1984)
and Rogerson (1984) by considering explicitly the incentive problems that arise from …

When drawing up a contract, it is often impracticable for the parties to specify all the relevant
contingencies. In particular, they may be unable to describe the states of the world in …

Townsend [1982] and others have argued that, in a multiperiod context, linked contracts may
be Pareto efficient relative to the private information environment. The similarities with the …

The impact of information dissemination and experimentation on dynamic adverse selection
in noisy agency relationships is examined. Significant deviations in terms of equilibrium …

Long-term contracts are valuable only if optimal contracting requires commitment to a plan
today that would not otherwise be adopted tomorrow. We show that commitments are …