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Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events.

Please check our website listings and social media feeds @STICERD_LSE at X and @LSE-STICERD-CASE at Bluesky for updates.

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Unless otherwise specified, in-person seminars are open to the public. Please ensure you have informed the event contact as early as possible.

Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.

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About this event

We study a principal contracting with a privately informed agent, where any contract is subject to renegotiation. Rather than specifying a renegotiation game, we propose conditions that the set of terminal outcomes of renegotiation must satisfy. Our central concept is a stable set of contract-belief pairs defined by external stability (outcomes not in the stable set can be improved to outcomes in the stable set) and internal stability (no strict mutual improvements exist within the stable set). Applied to contracting without commitment, our framework bounds the principal?s loss from lacking commitment by characterizing the largest payoff she can obtain when the terminal outcomes must be in a stable set. In a nonlinear contracting environment, this payoff is attained by pooling contracts that satisfy a no-distortion-at-the-bottom property.