IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Endogenous Matching and the Empirical Determinants of Contract Form

  • Daniel A. Ackerberg
  • Maristella Botticini

Theoretical work on contracts often identifies an "optimal" contract as a function of the characteristics of the principal and agent who are contracting. Correspondingly, empirical work on contracts often regresses contract form on observed (by the econometrician) characteristics of the principal and agent. This paper examines the econometric implications when some of the theoretically relevant characteristics are partially observed (e.g. proxied) or unobserved. We show that if there are incentives wehreby particular types of agents end up contracting (i.e. matching) with particular types of principals (and we argue that there are), one may end up with estimated co-efficients on the observed characteristics that are misleading. The problem is that this matching generates correlation between observable characteristics of one party and proxy errors of the other party, causing biases in many or all coefficients of interest. We then suggest a number of solutions to this problem, applying these solutins to a historical dataset on agricultural contracts between landlords and tenants in 15th Century Tuscany.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by Boston University, Institute for Economic Development in its series Boston University - Institute for Economic Development with number 92.

in new window

Date of creation: Jan 1999
Date of revision:
Handle: RePEc:fth:bosecd:92
Contact details of provider: Postal:
264 Bay State Road, Boston, MA 02215

Phone: 617-353-4030
Fax: 617-353-4143
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is featured on the following reading lists or Wikipedia pages:

  1. Endogenous Matching and the Empirical Determinants of Contract Form (JPE 2002) in ReplicationWiki

When requesting a correction, please mention this item's handle: RePEc:fth:bosecd:92. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.