Contract theory

Motivation

Introduction

Want to commit but cannot.

Cooperation without contracts

Co-operative games

Basic contracts

Defining contracts

contracts specify what agents will do under different future outcomes

Enforcement

Enforcers.

Determining violation.

What happens following violation

Third parties. can sign contract and punish those who deviate.

Assessment of damages

Incomplete contracts

Complete contracts

Incomplete contracts

Default contracts

Introduction

Impositions without contracts. ie, laws.

Can have competition for previous type of contract, not this.

Defaults for contracts page. specific to jurisdiction.

The principal-agent problem

Introduction

Moral hazard

Introduction

Adverse selection

Introduction