Fixed wages and bonuses in agency contracts: the case of a continuous state space

In this paper, we extend the state-contingent production approach to principal–agent problems to the case where the state space is an atomless continuum. The approach is modelled on the treatment of optimal tax problems. The central observation is that, under reasonable conditions, the optimal contract may involve a fixed wage with a bonus for above-normal performance. This is analogous to the phenomenon of "bunching" at the bottom in the optimal tax literature.

Linking contracts, processes and services: An event-driven approach

This paper addresses the problem of mapping business contract conditions onto the messages and rules that represent service interactions in a collaborative business process. We describe why this mapping is not straightforward by means of an example. We then consider a message-driven process language as a target for the mapping and use this mapping solution to discuss broad range of problems related to the mapping problem.