Contract Economics and the Renewal of Economics

The concept of contract has become essential to economics in the last 30 years. Three main theoretical frameworks arose: “incentive theory”, “incomplete-contract theory” and “transaction-costs theory.” These frameworks have enabled scholars to renew their analysis of microeconomic coordination problems and yielded implications for Industrial Economics. Beyond this, analyses of the performance of “market” economies and of the institutional framework were also renewed. Though substantial progress has been made, new developments are needed, requiring a better grasp of Bounded Rationality and also of the interactions between contracts and institutions.

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