  This paper studies the provision of incentives for information acquisition.
Information is costly for an agent to acquire and unobservable to a principal.
We show that any Pareto optimal contract has a decomposition into a fraction of
output, a state-dependent transfer, and an optimal distortion. Under this
decomposition: 1) the fraction of output paid is increasing in the set of
experiments available to the agent, 2) the state-dependent transfer indexes
contract payments to account for differences in output between states, 3) the
optimal distortion exploits complementarities in the cost of information
acquisition: experiment probabilities unalterable via contract payments stuck
against liability limits are substituted for, the substitution occurring
according to complementarities in the cost of information acquisition, and 4)
if and only if the agent's cost of experimentation is mutual information, the
optimal distortion takes the form of a decision-dependent transfer.
