This article analyzes a much debated clause in the coalition contract
between SPD and FDP in Rheinland-Pfalz. Two parties write a contract,
based on which decisions under incomplete information have to be made
at a later point in time. It is shown that a complex complete contract
can achieve the first best outcome. However, a simple incomplete cont
ract can implement the first best outcome only if use of seemingly ine
fficient randomization is made.