Synopses & Reviews
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.
Praise for the previous edition:
"The Economics of Contracts offers an excellent introduction to agency models. Written by one of the leading young researchers in contact 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'Économie Industrielle, Universite 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
Review
Salanié provides a broad overview of the economics of contracts. Concision and clarity make the book an elegant introduction to the subject for newcomers. But it is also a useful reference for experienced students and researchers. The MIT Press
Review
Salanié has written an elegant book, concise in its explanations and tightly focused on the most useful models and results of contract theory. His experience in both theory building and theory testing are plain to see in his sure-handed choices, which separate the chaff from the wheat in this huge and growing body of theory. I recommend this book highly to students and newcomers to the economic theory of contracts. Roger Guesnerie, Collège de France
Review
The first edition of Salanié's book provided an insightful introduction to the modern economics of incentives and contracts. This second edition keeps up with recent advances while maintaining the emphasis on key ideas and intuitions. A great read. Paul Milgrom, Professor of Economics, Stanford University
Review
andlt;Pandgt;"Salanié provides a broad overview of the economics of contracts. Concision and clarity make the book an elegant introduction to the subject for newcomers. But it is also a useful reference for experienced students and researchers."--Roger Guesnerie, Collège de Franceandlt;/Pandgt; The MIT Press The MIT Press
Review
andlt;Pandgt;"Salanié has written an elegant book, concise in its explanations and tightly focused on the most useful models and results of contract theory. His experience in both theory building and theory testing are plain to see in his sure-handed choices, which separate the chaff from the wheat in this huge and growing body of theory. I recommend this book highly to students and newcomers to the economic theory of contracts."--Paul Milgrom, Professor of Economics, Stanford Universityandlt;/Pandgt; The MIT Press
Review
andlt;Pandgt;"The first edition of Salanié's book provided an insightful introduction to the modern economics of incentives and contracts. This second edition keeps up with recent advances while maintaining the emphasis on key ideas and intuitions. A great read."--Patrick Rey, IDEI, University of Toulouseandlt;/Pandgt; The MIT Press
Synopsis
A concise introduction to the theory of contracts, emphasizing basic tools that allow the reader to understand the main theoretical models; revised and updated throughout for this edition.
Synopsis
andlt;Pandgt;A concise introduction to the theory of contracts, emphasizing basic tools that allow the reader to understand the main theoretical models; revised and updated throughout for this edition.andlt;/Pandgt;
Synopsis
andlt;Pandgt;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.andlt;/Pandgt;
About the Author
John W. Travis, M.D., M.P.H., President, Wellness Associates, authored the original Wellness Inventory (Wellness Associates, 1998), coauthored (with Regina Sara Ryan) the Wellness Workbook (Ten Speed Press, 1998), founded the Wellness Resource Center in Mill Valley, California (the first wellness center in the United States), and cofounded (with 20 other child-development professionals), the Alliance for Transforming the Lives of Children.