Ambiguity and Performance-Based Lawyer Compensation Contract in Arbitration

초록

his study explores how institutional ambiguity in arbitration affects performance-based compensation for legal professionals. Using a principal-agent model with ambiguity-averse agents, it finds that uncertainty leads to lower effort, less outcome-sensitive contracts, and reduced expected profits for firms. The findings extend contract theory and offer practical guidance for legal service contracting under uncertain arbitration outcomes.

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