Relational Contracts in a Persistent Environment

  • Suehyun Kwon
  • Published 2013


This paper studies relational contracts with partially persistent states, where the distribution of the state depends on the previous state. When the states are observable, with both exogenous and endogenous states, the optimal contract can be stationary, and an effort schedule can be implemented with a stationary contract if and only if it satisfies the IC… (More)