Economics of Contracts : Theories and Applications

by Eric Brousseau; Jean-Michel Glachant

• ISBN13: 9780511030369
• ISBN10: 0511030363
• Format: Nonspecific Binding
• Copyright: 2002-10-17
• Publisher: Cambridge University Press

Summary

A contract is an agreement under which two parties make reciprocal commitments in terms of their behavior to coordinate. As this concept has become essential to economics in the last 30 years, three main theoretical frameworks have emerged: 'incentive theory', 'incomplete-contract theory' and 'transaction-costs theory'. These frameworks have enabled scholars to renew both the microeconomics of coordination (with implications for industrial organization, labor economics, law and economics, organization design) and the macroeconomics of 'market' (decentralized) economies and of the institutional framework. These developments have resulted in new analyses of a firm's strategy and State intervention (regulation of public utilities, anti-trust, public procurement, institutional design, liberalization policies, etc.). Based on contributions by the leading scholars in the field, this book provides an overview of the past and recent developments in these analytical currents, presents their various aspects, and proposes expanding horizons for theoreticians and practitioners.

Table of Contents

Figures	p. viii
Tables	p. ix
Contributors	p. x
Acknowledgments	p. xvi
Introduction	p. 1
The Economics of Contracts and the Renewal of Economics	p. 3
Notes	p. 30
Appendix: Canonical Models of Theories of Contract	p. 31
Notes	p. 41
Contracts, Organizations, and Institutions	p. 43
The New Institutional Economics	p. 45
Notes	p. 48
Contract and Economic Organization	p. 49
Notes	p. 58
The Role of Incomplete Contracts in Self-Enforcing Relationships	p. 59
Notes	p. 70
Entrepreneurship, Transaction-Cost Economics, and the Design of Contracts	p. 72
Notes	p. 94
Law and Economics	p. 97
The Contract as Economic Trade	p. 99
Notes	p. 114
Contract Theory and Theories of Contract Regulation	p. 116
Notes	p. 125
Economic Reasoning and the Framing of Contract Law: Sale of an Asset of Uncertain Value	p. 126
Notes	p. 137
A Transactions-Costs Approach to the Analysis of Property Rights	p. 140
Notes	p. 155
Theoretical Developments: Where Do We Stand?	p. 157
Transaction Costs and Incentive Theory	p. 159
Notes	p. 177
Norms and the Theory of the Firm	p. 180
Notes	p. 191
Allocating Decision Rights Under Liquidity Constraints	p. 193
Notes	p. 210
Complexity and Contract	p. 213
Notes	p. 238
Authority, as Flexibility, is at the Core of Labor Contracts	p. 241
Notes	p. 250
Positive Agency Theory: Place and Contributions	p. 251
Notes	p. 270
Testing Contract Theories	p. 271
Econometrics of Contracts: an Assessment of Developments in the Empirical Literature on Contracting	p. 273
Notes	p. 291
Experiments on Moral Hazard and Incentives: Reciprocity and Surplus-Sharing	p. 293
Notes	p. 312
Applied Issues: Contributions to Industrial Organization	p. 313
Residual Claims and Self-Enforcement as Incentive Mechanisms in Franchise Contracts: Substitutes or Complements?	p. 315
Notes	p. 333
The Quasi-Judicial Role of Large Retailers: an Efficiency Hypothesis of Their Relation with Suppliers	p. 337
Notes	p. 355
Interconnection Agreements in Telecommunications Networks: from Strategic Behaviors to Property Rights	p. 358
Notes	p. 372
Licensing in the Chemical Industry	p. 373
Notes	p. 391
Applied Issues: Contributions to Industrial Organization	p. 393
Inter-Company Agreements and Ec Competition Law	p. 395
Notes	p. 414
Incentive Contracts in Utility Regulation	p. 416
Notes	p. 438
Contractual Choice and Performance: the Case of Water Supply in France	p. 440
Notes	p. 461
Institutional or Structural: Lessons from International Electricity Sector Reforms	p. 463
Notes	p. 495
Electricity Sector Restructuring and Competition: a Transactions-Cost Perspective	p. 503
Notes	p. 528
Bibliography	p. 531
Index of Names	p. 570
Subject Index	p. 579
Table of Contents provided by Publisher. All Rights Reserved.