Features
- Cover Type: Hard Cover with 224 pages
- Published by: The MIT Press
- Edition: 2nd Edition March 15, 2005
- Written in: English
- ISBN 10 Number: 0262195259
- ISBN 13 Number: 978-0262195256
-
Book Dimensions:
8.9 x 6 x 0.8 inches
- Weighs: 1 pounds
Product Review
"
The Economics of Contracts offers an great introduction to agency models. Written by one of the leading young researchers in contract theory, it is rigorous, clear, concise and up-to-date. Researchers and students who want to learn about the economics of incentives will want to read this primer."
—
Jean Tirole, Institut d'Economie Industrielle, Université des Sciences Sociales, France
"Students will find this a very useful introduction to the ideas of contract theory. Salanié has managed to summarize a large amount of material in a relatively short number of pages in a highly accessible and readable manner."
—
Oliver Hart, Professor of Economics,
Harvard University
--This text refers to the
Hardcover
edition.
Product Description
The theory of contracts grew out of the failure of the general equilibrium model to account for the strategic interactions among agents that arise from informational asymmetries. This popular text, revised and updated throughout for the second edition, serves as a concise and rigorous introduction to the theory of contracts for graduate students and professional economists. The book presents the main models of the theory of contracts, particularly the basic models of adverse selection, signaling, and moral hazard. It emphasizes the methods used to analyze the models, but also includes brief introductions to many of the applications in different fields of economics. The goal is to give readers the tools to understand the basic models and create their own.
For the second edition, major changes have been made to chapter 3, on examples and extensions for the adverse selection model, which now includes more thorough discussions of multiprincipals, collusion, and multidimensional adverse selection, and to chapter 5, on moral hazard, with the limited liability model, career concerns, and common agency added to its topics. Two chapters have been completely rewritten: chapter 7, on the theory of incomplete contracts, and chapter 8, on the empirical literature in the theory of contracts. An appendix presents concepts of noncooperative game theory to supplement chapters 4 and 6. Exercises follow chapters 2 through 5.
Reader Reviews
This review is from: The Economics of Contracts: A Primer (Hardcover)
Salanie's book covers the standard areas of contract theory; adverse selection, moral hazard, signalling etc, along with chapters on the dynamics of complete contracts, incomplete contracts and a final chapter on the empirical work on contracts. The material on dynamics and incomplete contracts is most welcome as many other books in this area do not cover it. Perhaps more space could have been given over to incomplete contracts given the increasing importance of them. The book manages to cover a large amount of material in a relatively small number of pages, it is just over 200 pages. Most of this material is presented in an accessible and readable manner and most graduate students in economics should be able to read the book. The most obvious problem with the book is the number of small errors it contains. Some of the figures have points that are in the wrong place; there are a number of what look like typos in the text, being told that an indifference curve goes through a point (q2,t2) when in fact it goes through (q1,t1) for example. While these are only minor problems they do distract from the otherwise good impression that the book makes.
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