Incomplete Contracts: Foundations and Applications
More than twenty years have elapsed since Oliver Hart's Fisher-Schultz lecture on the topic of incomplete contracts. Incomplete contract theory (ICT) has become a rigorous and widely used approach in dealing with various issues. It's applications include firm theory (hierarchies, ownership and control rights, authority,etc.), international trade (judicial quality as comparative advantage, intra-firm trade, etc.), scope of organizations (including the government, see Hart et. al. 1997) and many others. However, it's theoretical foundations have been seriously debated since its first emergence, and even today, the debate is not coming to an end. We will review several significant works on the foundations on ICT, and from comparing their differences in assumptions, methodology and results, we could get some merit on the critical disagreement over these issues, and from these critical disagreements, we could also capture the central ideas for future research on this field. The critical comments on Hart and Moore's 2008 paper about reference point may also suggest that ICT desperately need a solid foundation.
|Date of creation:||31 May 2010|
|Date of revision:||10 Jun 2010|
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- Eric Maskin & John Moore, 1999.
"Implementation and Renegotiation,"
Harvard Institute of Economic Research Working Papers
1863, Harvard - Institute of Economic Research.
- Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1994.
"Renegotiation Design with Unverifiable Information,"
12375014, Harvard University Department of Economics.
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"Employment Contracts, Influence Activities and Efficient Organization Design,"
Economics Working Papers
8741, University of California at Berkeley.
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- Schmidt,Klaus M., 1991.
"The costs and benefits of privatization,"
Discussion Paper Serie A
330, University of Bonn, Germany.
- Maskin, Eric & Tirole, Jean, 1992. "The Principal-Agent Relationship with an Informed Principal, II: Common Values," Econometrica, Econometric Society, vol. 60(1), pages 1-42, January.
- Oliver Hart & John Moore, 1988.
"Property Rights and the Nature of the Firm,"
495, Massachusetts Institute of Technology (MIT), Department of Economics.
- Paul Milgrom & John Roberts, 1988. "Economic Theories of the Firm: Past, Present, and Future," Canadian Journal of Economics, Canadian Economics Association, vol. 21(3), pages 444-58, August.
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- Schmidt, Klaus M., 1996.
"The costs and benefits of privatization: An incomplete contracts approach,"
Munich Reprints in Economics
19773, University of Munich, Department of Economics.
- Schmidt, Klaus M, 1996. "The Costs and Benefits of Privatization: An Incomplete Contracts Approach," Journal of Law, Economics and Organization, Oxford University Press, vol. 12(1), pages 1-24, April.
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"Production , Information Costs, and Economic Organization,"
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"Incomplete Contracts and Renegotiation,"
CEPR Discussion Papers
60, C.E.P.R. Discussion Papers.
- Oliver Hart & John Moore, 1994. "A Theory of Debt Based on the Inalienability of Human Capital," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 841-879.
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- repec:oup:restud:v:66:y:1999:i:1:p:115-38 is not listed on IDEAS
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