Tabla de Contenidos: “…Falsifications: A Normative Evaluation -- 7 Applied Microeconomics -- 7.1 Applied Microeconomics as an Art -- 7.2 Convergence of Applied Microeconomics and BWL -- 8 Model of Optimal Contract Design -- 8.1 Economics of Institutions -- 8.2 Solving for the Optimal Contract -- 8.3 The Rationale for the Micro-foundation -- 8.4 A Structured Approach -- 9 Practical Life and Theory -- IV ANALYTICAL AGENCY MODELS -- 1 Overview -- 2 The Classical Risk-Incentive Trade-Off -- 2.1 The Basic Model -- 2.1.1 Introduction -- 2.1.2 Modeling Assumptions -- 2.1.3 Contractible Effort -- 2.1.4 Uncontractible Effort -- 2.1.5 Discussion -- 2.2 Risk-Incentive Trade-off for Linear Contracts -- 2.2.1 Introduction -- 2.2.2 Modeling Assumptions -- 2.2.3 The Model -- 2.2.4 Discussion -- 2.2.5 Appendix -- 2.3 Risk Sharing -- 2.3.1 Introduction -- 2.3.2 The Model -- 2.3.3 Model Extension: Diversification -- 2.3.4 Discussion -- 2.4 The Optimal Contract -- 2.4.1 Introduction -- 2.4.2 Mechanics of the Optimal Sharing Rule -- 2.4.3 The Case for Linear Contracts -- 2.4.4 Valuable Information -- 2.4.5 Discussion -- 2.5 Limitations and Extensions -- 3 Error in judgement, Bankruptcy -- 3.1 Input Monitoring -- 3.1.1 Introduction -- 3.1.2 Modeling Assumptions -- 3.1.3 Absence of both Error and Bankruptcy Constraint -- 3.1.4 Bankruptcy constraint -- 3.1.5 Extension: The role of Agent Risk Averseness -- 3.1.6 Presence of Error -- 3.1.7 Discussion…”

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