International audienceWe characterize the optimal dynamic contract for a long-term basic service when an uncertain add-on is required later on. Introducing firm risk aversion has two impacts. Profits for the basic service can be backloaded to induce cheaper information revelation for this service: an Income Effect which reduces output distortions. The firm must also bear some risk to induce information revelation for the add-on. This Risk Effect reduces the level of the add-on but hardens information revelation for the basic service. The interaction between these effects has important implications for the dynamics of distortions, contract renegotiation, and the value of incomplete contracts

We study what profiles of individuals were the most likely to give up their entrepreneurial project at the beginning of the Covid‐19 crisis. To do so, we run an experiment during the first lockdown in the United Kingdom. Our results show that the first months of the crisis have a sharp screening effect: 63% of prospective entrepreneurs postpone or cancel their project in May 2020. Taste for risk or competition does not characterize those who stick to their project. Instead, low opportunity costs to continue and concern for one's own interest instead of cooperation are common among entrepreneurs who persist.

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Long-term contracting implies contracting based on expected future demand. In this paper, I develop a multiperiod procurement model where, once the actual level of demand is realized, the irreversible initial provision level may be supplemented by additional provisions. This paper shows that, with the possibility of additional upward adjustments, the first-period provision level will be lower than when no additional adjustments are possible. This reduction in first-period provision level is higher under complete contracting than under incomplete contracting, and because of the reduction in information rents it yields a higher expected utility to the principal but lower total welfare.

This paper studies the interaction between financially constrained and financially strong firms on a procurement market. It characterizes and discusses a procurement agency's optimal response when faced with financially asymmetric firms. By considering a dynamic setting, both present and future consequences and incentives are taken into account.JEL Classification: D82, G30, H57.