We study a multidivisional firm where headquarters are exposed to moral hazard by division managers under uncertainty (or "ambiguity") aversion. We show the aggregation and linearity results of Holmström and Milgrom (1987) hold in...
In the debate over contractual freedom or enabling-versus-mandatory rules in fiduciary law, those who do not adhere to an unbridled contractatian approach tend to justify fiduciary law’s strict posture by appealing to transaction...
Over 20 years, M&A contracts have more than doubled in size ? from 35 to 88 single-spaced pages in this paper?s font. They have also grown significantly in linguistic complexity ? from post-graduate ?grade 20? to post-doctoral...
We examine the within-firm resource allocation and restructuring effects of creditor intervention and their relationship to performance gains at firms violating covenants in private credit agreements. By linking firms to...
There is a growing concern about the frequency of renegotiations in Public Private Partnerships (PPPs). We focus our research on the Portuguese experience and study 254 renegotiation events of 35 PPP contracts since 1995, and...
M&A transactions are governed by contracts that exhibit constrained variation ? they are negotiated, yet full of boilerplate, tailored, yet full of patterns and regularities. This paper (a chapter of the Research Handbook on...
Holmström (1979) provides a condition for a signal to have positive value assuming the validity of the first-order approach. This paper extends Holmström's analysis to settings where the first-order approach may not hold. We...
This paper studies the value of more precise signals on agent performance in an optimal contracting model with endogenous effort. With limited liability, the agent's wage is increasing in output only if output exceeds a threshold, else...
The informativeness principle demonstrates that a contract should depend on informative signals. This paper studies how it should do so. Signals that indicate the output distribution has shifted to the left (e.g. weak industry...
We conjecture that venture capitalists and their investors often fall prey to what is known as ?collective conservatism.? We investigate this conjecture by analyzing boilerplate provisions in limited partnership agreements. When...
This paper develops a theory of the joint allocation of control and cash-flow rights in venture capital deals. When the need for VC advice and support calls for a highpowered outside claim, the entrepreneur should optimally retain...
