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Oil in subsurface reservoirs is biodegraded by resident microbial communities. Water-mediated, anaerobic conversion of hydrocarbons to methane and CO2, catalyzed by syntrophic bacteria and methanogenic archaea, is thought to be one of the dominant processes. We compared 160 microbial community compositions in ten hydrocarbon resource environments (HREs) and(More)
We derive the optimal dynamic contract in a continuous-time principal-agent setting, and implement it with a capital structure (credit line, long-term debt, and equity) over which the agent controls the payout policy. While the project's volatility and liquidation cost have little impact on the firm's total debt capacity, they increase the use of credit(More)
We study a continuous-time principal-agent model in which a risk-neutral agent with limited liability must exert unobservable effort to reduce the likelihood of large but relatively infrequent losses. Firm size can be decreased at no cost, and increased subject to adjustment costs. In the optimal contract, investment takes place only if a long enough period(More)
We develop an analytically tractable model integrating dynamic investment theory with dynamic optimal incentive contracting, thereby endogenizing financing constraints. Incentive contracting generates a history-dependent wedge between marginal and average q, and both vary over time as good (bad) performance relaxes (tightens) financing constraints.(More)
This paper models a …rm's rollover risk generated by con ‡ict of interest between debt and equity holders. When the …rm faces losses in rolling over its maturing debt, its equity holders are willing to absorb the losses only if the option value of keeping the …rm alive justi…es the cost of paying o¤ the maturing debt. Our model shows that both deteriorating(More)
Financing can be cheaper in certain periods than others. For example, in crisis periods, firms face tougher financing terms than in normal times. We develop an analytically tractable dynamic framework for firms facing stochastic financing opportunities. Financially constrained firms choose intertemporal equity issuance, internal cash accumulation, corporate(More)
We study optimal executive compensation in a fully dynamic framework where the CEO consumes in multiple periods, can undo the contract by privately saving, and can also temporarily inflate the stock price. Despite the complex setup, we obtain a simple closed-form contract. It yields clear predictions for how the optimal level and sensitivity of pay varies(More)
This paper studies a model of long-term contracting for experimentation. We consider a principal-agent relationship with adverse selection on the agent's ability, dynamic moral hazard , and private learning about project quality. We find that each of these elements plays an essential role in structuring dynamic incentives, and it is only their interaction(More)
Mycobacterium avium subsp. paratuberculosis is a pathogen which causes a debilitating chronic enteritis in ruminants. Unfortunately, the mechanisms that control M. avium subsp. paratuberculosis persistence during infection are poorly understood and the key steps for developing Johne's disease remain elusive. A proteomic analysis approach, based on one(More)
We introduce uncertainty into the Holmstrom and Milgrom (1987) model to study optimal long-term contracting with learning. In the dynamic relationship, the agent's shirking not only reduces the current output, but also increases the agent's information rent due to the persistent belief manipulation e¤ect. We characterize the optimal contract by solving a(More)