Contract Theory

Contract Theory

Author: Patrick Bolton

Publisher: MIT Press

Published: 2004-12-10

Total Pages: 746

ISBN-13: 9780262025768

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A comprehensive introduction to contract theory, emphasizing common themes and methodologies as well as applications in key areas. Despite the vast research literature on topics relating to contract theory, only a few of the field's core ideas are covered in microeconomics textbooks. This long-awaited book fills the need for a comprehensive textbook on contract theory suitable for use at the graduate and advanced undergraduate levels. It covers the areas of agency theory, information economics, and organization theory, highlighting common themes and methodologies and presenting the main ideas in an accessible way. It also presents many applications in all areas of economics, especially labor economics, industrial organization, and corporate finance. The book emphasizes applications rather than general theorems while providing self-contained, intuitive treatment of the simple models analyzed. In this way, it can also serve as a reference for researchers interested in building contract-theoretic models in applied contexts.The book covers all the major topics in contract theory taught in most graduate courses. It begins by discussing such basic ideas in incentive and information theory as screening, signaling, and moral hazard. Subsequent sections treat multilateral contracting with private information or hidden actions, covering auction theory, bilateral trade under private information, and the theory of the internal organization of firms; long-term contracts with private information or hidden actions; and incomplete contracts, the theory of ownership and control, and contracting with externalities. Each chapter ends with a guide to the relevant literature. Exercises appear in a separate chapter at the end of the book.


Book Synopsis Contract Theory by : Patrick Bolton

Download or read book Contract Theory written by Patrick Bolton and published by MIT Press. This book was released on 2004-12-10 with total page 746 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive introduction to contract theory, emphasizing common themes and methodologies as well as applications in key areas. Despite the vast research literature on topics relating to contract theory, only a few of the field's core ideas are covered in microeconomics textbooks. This long-awaited book fills the need for a comprehensive textbook on contract theory suitable for use at the graduate and advanced undergraduate levels. It covers the areas of agency theory, information economics, and organization theory, highlighting common themes and methodologies and presenting the main ideas in an accessible way. It also presents many applications in all areas of economics, especially labor economics, industrial organization, and corporate finance. The book emphasizes applications rather than general theorems while providing self-contained, intuitive treatment of the simple models analyzed. In this way, it can also serve as a reference for researchers interested in building contract-theoretic models in applied contexts.The book covers all the major topics in contract theory taught in most graduate courses. It begins by discussing such basic ideas in incentive and information theory as screening, signaling, and moral hazard. Subsequent sections treat multilateral contracting with private information or hidden actions, covering auction theory, bilateral trade under private information, and the theory of the internal organization of firms; long-term contracts with private information or hidden actions; and incomplete contracts, the theory of ownership and control, and contracting with externalities. Each chapter ends with a guide to the relevant literature. Exercises appear in a separate chapter at the end of the book.

Contract Theory in Continuous-Time Models

Contract Theory in Continuous-Time Models

Author: Jakša Cvitanic

Publisher: Springer Science & Business Media

Published: 2012-09-26

Total Pages: 258

ISBN-13: 3642141994

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In recent years there has been a significant increase of interest in continuous-time Principal-Agent models, or contract theory, and their applications. Continuous-time models provide a powerful and elegant framework for solving stochastic optimization problems of finding the optimal contracts between two parties, under various assumptions on the information they have access to, and the effect they have on the underlying "profit/loss" values. This monograph surveys recent results of the theory in a systematic way, using the approach of the so-called Stochastic Maximum Principle, in models driven by Brownian Motion. Optimal contracts are characterized via a system of Forward-Backward Stochastic Differential Equations. In a number of interesting special cases these can be solved explicitly, enabling derivation of many qualitative economic conclusions.


Book Synopsis Contract Theory in Continuous-Time Models by : Jakša Cvitanic

Download or read book Contract Theory in Continuous-Time Models written by Jakša Cvitanic and published by Springer Science & Business Media. This book was released on 2012-09-26 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: In recent years there has been a significant increase of interest in continuous-time Principal-Agent models, or contract theory, and their applications. Continuous-time models provide a powerful and elegant framework for solving stochastic optimization problems of finding the optimal contracts between two parties, under various assumptions on the information they have access to, and the effect they have on the underlying "profit/loss" values. This monograph surveys recent results of the theory in a systematic way, using the approach of the so-called Stochastic Maximum Principle, in models driven by Brownian Motion. Optimal contracts are characterized via a system of Forward-Backward Stochastic Differential Equations. In a number of interesting special cases these can be solved explicitly, enabling derivation of many qualitative economic conclusions.

Contract Theory

Contract Theory

Author: Stephen A. Smith

Publisher: OUP Oxford

Published: 2004-03-25

Total Pages: 480

ISBN-13: 0191018813

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This book is both an examination of, and a contribution to, our understanding of the theoretical foundations of the common law of contract. Focusing on contemporary debates in contract theory, Contract Theory aims to help readers better understand the nature and justification of the general idea of contractual obligation, as well as the nature and justification of the particular rules that make up the law of contract. The book is in three parts. Part I introduces the idea of 'contract theory', and presents a framework for identifying, classifying, and evaluating contract theories. Part II describes and evaluates the most important general theories of contract; examples include promissory theories, reliance-based theories, and economic theories. In Part III, the theoretical issues raised by the various specific doctrines that make up the law of contract (e.g., offer and acceptance, consideration, mistake, remedies, etc.) are examined in separate chapters. The legal focus of the book is the common law of the United Kingdom, but the theoretical literature discussed is international in origin; the arguments discussed are thus relevant to understanding the law of other common law jurisdictions and, in many instances, to understanding the law of civil law jurisdictions as well.


Book Synopsis Contract Theory by : Stephen A. Smith

Download or read book Contract Theory written by Stephen A. Smith and published by OUP Oxford. This book was released on 2004-03-25 with total page 480 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is both an examination of, and a contribution to, our understanding of the theoretical foundations of the common law of contract. Focusing on contemporary debates in contract theory, Contract Theory aims to help readers better understand the nature and justification of the general idea of contractual obligation, as well as the nature and justification of the particular rules that make up the law of contract. The book is in three parts. Part I introduces the idea of 'contract theory', and presents a framework for identifying, classifying, and evaluating contract theories. Part II describes and evaluates the most important general theories of contract; examples include promissory theories, reliance-based theories, and economic theories. In Part III, the theoretical issues raised by the various specific doctrines that make up the law of contract (e.g., offer and acceptance, consideration, mistake, remedies, etc.) are examined in separate chapters. The legal focus of the book is the common law of the United Kingdom, but the theoretical literature discussed is international in origin; the arguments discussed are thus relevant to understanding the law of other common law jurisdictions and, in many instances, to understanding the law of civil law jurisdictions as well.

Social Contract Theory for a Diverse World

Social Contract Theory for a Diverse World

Author: Ryan Muldoon

Publisher: Taylor & Francis

Published: 2016-10-14

Total Pages: 142

ISBN-13: 1134793545

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Very diverse societies pose real problems for Rawlsian models of public reason. This is for two reasons: first, public reason is unable accommodate diverse perspectives in determining a regulative ideal. Second, regulative ideals are unable to respond to social change. While models based on public reason focus on the justification of principles, this book suggests that we need to orient our normative theories more toward discovery and experimentation. The book develops a unique approach to social contract theory that focuses on diverse perspectives. It offers a new moral stance that author Ryan Muldoon calls, "The View From Everywhere," which allows for substantive, fundamental moral disagreement. This stance is used to develop a bargaining model in which agents can cooperate despite seeing different perspectives. Rather than arguing for an ideal contract or particular principles of justice, Muldoon outlines a procedure for iterated revisions to the rules of a social contract. It expands Mill's conception of experiments in living to help form a foundational principle for social contract theory. By embracing this kind of experimentation, we move away from a conception of justice as an end state, and toward a conception of justice as a trajectory. Listen to Robert Talisse interview Ryan Muldoon about Social Contract Theory for a Diverse World on the podcast, New Books in Philosophy: http://tinyurl.com/j9oq324 Also, read Ryan Muldoon’s related Niskanen Center article, "Diversity and Disagreement are the Solution, Not the Problem," published Jan. 10, 2017: https://niskanencenter.org/blog/diversity-disagreement-solution-not-problem/


Book Synopsis Social Contract Theory for a Diverse World by : Ryan Muldoon

Download or read book Social Contract Theory for a Diverse World written by Ryan Muldoon and published by Taylor & Francis. This book was released on 2016-10-14 with total page 142 pages. Available in PDF, EPUB and Kindle. Book excerpt: Very diverse societies pose real problems for Rawlsian models of public reason. This is for two reasons: first, public reason is unable accommodate diverse perspectives in determining a regulative ideal. Second, regulative ideals are unable to respond to social change. While models based on public reason focus on the justification of principles, this book suggests that we need to orient our normative theories more toward discovery and experimentation. The book develops a unique approach to social contract theory that focuses on diverse perspectives. It offers a new moral stance that author Ryan Muldoon calls, "The View From Everywhere," which allows for substantive, fundamental moral disagreement. This stance is used to develop a bargaining model in which agents can cooperate despite seeing different perspectives. Rather than arguing for an ideal contract or particular principles of justice, Muldoon outlines a procedure for iterated revisions to the rules of a social contract. It expands Mill's conception of experiments in living to help form a foundational principle for social contract theory. By embracing this kind of experimentation, we move away from a conception of justice as an end state, and toward a conception of justice as a trajectory. Listen to Robert Talisse interview Ryan Muldoon about Social Contract Theory for a Diverse World on the podcast, New Books in Philosophy: http://tinyurl.com/j9oq324 Also, read Ryan Muldoon’s related Niskanen Center article, "Diversity and Disagreement are the Solution, Not the Problem," published Jan. 10, 2017: https://niskanencenter.org/blog/diversity-disagreement-solution-not-problem/

Advances in Economic Theory

Advances in Economic Theory

Author: Truman Fassett Bewley

Publisher: CUP Archive

Published: 1989-07-28

Total Pages: 452

ISBN-13: 9780521389259

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These articles should be helpful to anyone with training in economics.


Book Synopsis Advances in Economic Theory by : Truman Fassett Bewley

Download or read book Advances in Economic Theory written by Truman Fassett Bewley and published by CUP Archive. This book was released on 1989-07-28 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: These articles should be helpful to anyone with training in economics.

Justice in Transactions

Justice in Transactions

Author: Peter Benson

Publisher: Harvard University Press

Published: 2019-12-03

Total Pages: 625

ISBN-13: 0674237595

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Legal thinkers typically justify contract law on the basis of economics or promissory morality. But Peter Benson takes another approach. He argues that contract is best explained as a transfer of rights governed by a conception of justice. The result is a comprehensive theory of contract law congruent with Rawlsian liberalism.


Book Synopsis Justice in Transactions by : Peter Benson

Download or read book Justice in Transactions written by Peter Benson and published by Harvard University Press. This book was released on 2019-12-03 with total page 625 pages. Available in PDF, EPUB and Kindle. Book excerpt: Legal thinkers typically justify contract law on the basis of economics or promissory morality. But Peter Benson takes another approach. He argues that contract is best explained as a transfer of rights governed by a conception of justice. The result is a comprehensive theory of contract law congruent with Rawlsian liberalism.

Contract Theory for Wireless Networks

Contract Theory for Wireless Networks

Author: Yanru Zhang

Publisher: Springer

Published: 2017-02-15

Total Pages: 121

ISBN-13: 331953288X

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This book presents theoretical research between wireless communications, networking, and economics using the framework of contract theory. This work fills a void in the literature by closely combining contract theoretical approaches with wireless networks design problems. Topics covered include classification in contract theory, reward design, adverse selection, and moral hazard. The authors also explore incentive mechanisms for device-to-device communication in cellular networks, insurance plans for service assurance in cloud computing markets with incomplete information, multi-dimensional incentive mechanisms and tournament based incentive mechanisms in mobile crowdsourcing. Financial applications include financing contracts with adverse selection for spectrum trading in cognitive radio networks and complementary investment of infrastructure and service providers in wireless network visualization. This book offers a useful reference for engineers and researchers in the wireless communication community who seek to integrate the notions from contract theory and wireless engineering, while emphasizing on how contract theory can be applied in wireless networks. It is also suitable for advanced-level students studying information systems or communications engineering.


Book Synopsis Contract Theory for Wireless Networks by : Yanru Zhang

Download or read book Contract Theory for Wireless Networks written by Yanru Zhang and published by Springer. This book was released on 2017-02-15 with total page 121 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book presents theoretical research between wireless communications, networking, and economics using the framework of contract theory. This work fills a void in the literature by closely combining contract theoretical approaches with wireless networks design problems. Topics covered include classification in contract theory, reward design, adverse selection, and moral hazard. The authors also explore incentive mechanisms for device-to-device communication in cellular networks, insurance plans for service assurance in cloud computing markets with incomplete information, multi-dimensional incentive mechanisms and tournament based incentive mechanisms in mobile crowdsourcing. Financial applications include financing contracts with adverse selection for spectrum trading in cognitive radio networks and complementary investment of infrastructure and service providers in wireless network visualization. This book offers a useful reference for engineers and researchers in the wireless communication community who seek to integrate the notions from contract theory and wireless engineering, while emphasizing on how contract theory can be applied in wireless networks. It is also suitable for advanced-level students studying information systems or communications engineering.

Firms, Contracts, and Financial Structure

Firms, Contracts, and Financial Structure

Author: Oliver Hart

Publisher: Clarendon Press

Published: 1995-10-05

Total Pages: 244

ISBN-13: 0191521728

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This book provides a framework for thinking about economic instiutions such as firms. The basic idea is that institutions arise in situations where people write incomplete contracts and where the allocation of power or control is therefore important. Power and control are not standard concepts in economic theory. The book begins by pointing out that traditional approaches cannot explain on the one hand why all transactions do not take place in one huge firm and on the other hand why firms matter at all. An incomplete contracting or property rights approach is then developed. It is argued that this approach can throw light on the boundaries of firms and on the meaning of asset ownership. In the remainder of the book, incomplete contacting ideas are applied to understand firms' financial decisions, in particular, the nature of debt and equity (why equity has votes and creditors have foreclosure rights); the capital structure decisions of public companies; optimal bankruptcy procedure; and the allocation of voting rights across a company's shares. The book is written in a fairly non-technical style and includes many examples. It is aimed at advanced undergraduate and graduate students, academic and business economists, and lawyers as well as those with an interest in corporate finance, privatization and regulation, and transitional issues in Eastern Europe, the former Soviet Union, and China. Little background knowledge is required, since the concepts are developed as the book progresses and the existing literature is fully reviewed.


Book Synopsis Firms, Contracts, and Financial Structure by : Oliver Hart

Download or read book Firms, Contracts, and Financial Structure written by Oliver Hart and published by Clarendon Press. This book was released on 1995-10-05 with total page 244 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a framework for thinking about economic instiutions such as firms. The basic idea is that institutions arise in situations where people write incomplete contracts and where the allocation of power or control is therefore important. Power and control are not standard concepts in economic theory. The book begins by pointing out that traditional approaches cannot explain on the one hand why all transactions do not take place in one huge firm and on the other hand why firms matter at all. An incomplete contracting or property rights approach is then developed. It is argued that this approach can throw light on the boundaries of firms and on the meaning of asset ownership. In the remainder of the book, incomplete contacting ideas are applied to understand firms' financial decisions, in particular, the nature of debt and equity (why equity has votes and creditors have foreclosure rights); the capital structure decisions of public companies; optimal bankruptcy procedure; and the allocation of voting rights across a company's shares. The book is written in a fairly non-technical style and includes many examples. It is aimed at advanced undergraduate and graduate students, academic and business economists, and lawyers as well as those with an interest in corporate finance, privatization and regulation, and transitional issues in Eastern Europe, the former Soviet Union, and China. Little background knowledge is required, since the concepts are developed as the book progresses and the existing literature is fully reviewed.

Classical Social Contract Theory

Classical Social Contract Theory

Author: Sebastian Erckel

Publisher: GRIN Verlag

Published: 2009-05-11

Total Pages: 19

ISBN-13: 3640326946

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Essay from the year 2008 in the subject Politics - Political Theory and the History of Ideas Journal, grade: 80%= good, University of Kerala (Department of Political Science), course: Political Theory- Liberal Tradition, language: English, abstract: This essay compares the classical social contract theories of Hobbes, Locke and Rousseau. Different perceptions of the state of nature resulted in different ideas about the social contract and its emphasis on either security (Hobbes), individual rights (Locke) or the collective freedom of Rousseau's general will. Political philosophy is believed to have started with Plato’s “Republic”, the first known sophisticated analysis of a fundamental question that humans have probably been concerned with much longer: how should human society be organised, i.e. who should rule and why? Plato believed that ruling required special training and skills and should therefore be left to an aristocracy of guardians who had received extensive training. While the notion that ruling requires expertise can hardly be denied there is also agreement among most philosophers that whoever qualifies for the job of ruling needs to do so with the interest of the people in mind. But what is the interest of the people and how can it be discovered? According to Plato, a necessary precondition for rulers is wisdom and that is why he wanted his guardians to be especially trained in philosophy. One may think that the people themselves should know what is best for them but somewhat surprisingly this idea has been rejected not just by Plato but also by many philosophers following him. Another approach is to link rule on Earth to a mandate received from a divine Creator. However, even the idea that humans could not exist without a government has been questioned, most notably by anarchism. Thus, the question of how political rule, the power to make decisions for others, could be justified is an essential one. Only legitimate rule creates obligation and without obligation it is hard to see how any form of society can survive. It is precisely for these elementary questions that social contract theories attempt to provide an answer for. The social contract can be seen as a device both for justifying not only rule itself but a particular type of rule, and demonstrating that political obligation can indeed be demanded. A unique feature of the classical social contract theories discussed in this paper is that they started out with an analysis of the state of nature.


Book Synopsis Classical Social Contract Theory by : Sebastian Erckel

Download or read book Classical Social Contract Theory written by Sebastian Erckel and published by GRIN Verlag. This book was released on 2009-05-11 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2008 in the subject Politics - Political Theory and the History of Ideas Journal, grade: 80%= good, University of Kerala (Department of Political Science), course: Political Theory- Liberal Tradition, language: English, abstract: This essay compares the classical social contract theories of Hobbes, Locke and Rousseau. Different perceptions of the state of nature resulted in different ideas about the social contract and its emphasis on either security (Hobbes), individual rights (Locke) or the collective freedom of Rousseau's general will. Political philosophy is believed to have started with Plato’s “Republic”, the first known sophisticated analysis of a fundamental question that humans have probably been concerned with much longer: how should human society be organised, i.e. who should rule and why? Plato believed that ruling required special training and skills and should therefore be left to an aristocracy of guardians who had received extensive training. While the notion that ruling requires expertise can hardly be denied there is also agreement among most philosophers that whoever qualifies for the job of ruling needs to do so with the interest of the people in mind. But what is the interest of the people and how can it be discovered? According to Plato, a necessary precondition for rulers is wisdom and that is why he wanted his guardians to be especially trained in philosophy. One may think that the people themselves should know what is best for them but somewhat surprisingly this idea has been rejected not just by Plato but also by many philosophers following him. Another approach is to link rule on Earth to a mandate received from a divine Creator. However, even the idea that humans could not exist without a government has been questioned, most notably by anarchism. Thus, the question of how political rule, the power to make decisions for others, could be justified is an essential one. Only legitimate rule creates obligation and without obligation it is hard to see how any form of society can survive. It is precisely for these elementary questions that social contract theories attempt to provide an answer for. The social contract can be seen as a device both for justifying not only rule itself but a particular type of rule, and demonstrating that political obligation can indeed be demanded. A unique feature of the classical social contract theories discussed in this paper is that they started out with an analysis of the state of nature.

Just Exchange

Just Exchange

Author: Francis H. Buckley

Publisher: Routledge

Published: 2004-11-30

Total Pages: 216

ISBN-13: 1135996180

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Now, for the first time, there is a comprehensive, eminently readable book designed to focus thinking in the area of contract law. This book bridges the gap between law and economics by confronting normative values that economists too often deem the preserve of moral philosophers. Contract theorists, on the other hand, are seldom in sympathy with economic efficiency norms. While free bargaining continues to be regarded with suspicion by legal scholars who are hostile to private ordering, the proper scope of free bargaining remains in dispute. Combined with a recent renewed interest in this field, these academic tensions mean that the time is right for a reconsideration of contract law. Drawing on scholarship from diverse fields and using illuminating and erudite examples, Just Exchange is entertaining as well as informative. Of interest to economists, lawyers, public policy-makers and those intersted in contract theory, this volume is a valuable overview of a vital intersection between legal studies and economics.


Book Synopsis Just Exchange by : Francis H. Buckley

Download or read book Just Exchange written by Francis H. Buckley and published by Routledge. This book was released on 2004-11-30 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: Now, for the first time, there is a comprehensive, eminently readable book designed to focus thinking in the area of contract law. This book bridges the gap between law and economics by confronting normative values that economists too often deem the preserve of moral philosophers. Contract theorists, on the other hand, are seldom in sympathy with economic efficiency norms. While free bargaining continues to be regarded with suspicion by legal scholars who are hostile to private ordering, the proper scope of free bargaining remains in dispute. Combined with a recent renewed interest in this field, these academic tensions mean that the time is right for a reconsideration of contract law. Drawing on scholarship from diverse fields and using illuminating and erudite examples, Just Exchange is entertaining as well as informative. Of interest to economists, lawyers, public policy-makers and those intersted in contract theory, this volume is a valuable overview of a vital intersection between legal studies and economics.