Contracting with Imperfect Commitment: Minimal Canonical Contracts

TL;DR

This paper develops a unified framework for contracting with limited commitment, accommodating diverse preferences and environments, and identifying minimal contract spaces that determine equilibrium outcomes.

Contribution

It introduces a minimal canonical contract space framework that generalizes previous models to include infinite types, non-quasi-linear utilities, and multi-principal settings.

Findings

Framework accommodates infinite agent types.

Applicable to non-quasi-linear utilities.

Extends to multi-principal environments.

Abstract

We study contracting with imperfect commitment and identify minimal canonical contract spaces that fully characterize equilibrium outcomes under general preferences. Different from previous solutions, our framework accommodates infinite agent type spaces (unlike Bester and Strausz (2001)), non-quasi-linear utilities (unlike Skreta (2006)), and settings where the principal lacks the commitment power typically assumed in information design (unlike Doval and Skreta (2021)). Moreover, our results apply to both single- and multi-principal environments, providing a unified and tractable approach to contracting under limited commitment.