This paper offers a non-technical discussion of the literature on the theoretical foundations of the incomplete contracting approach.

In this paper it is demonstrated that voluntary bargaining over a collective decision under asymmetric information may well lead to ex post efficiency if the default decision is non-trivial. It is argued that the default decision may be interpreted as a 'simple' contract that the parties have...

In this working paper, G. Tullock’s book “On Voting: a public choice approach” is discussed.

We discuss the literature on vertical relationships between firms from a contract-theoretic perspective.

In this working paper, T.L. Anderson and F.S. McChesney’s book “Property Rights: Cooperation, Conflict, and Law” is discussed.

In this paper we discuss "lock in effects" and "hold-up problems" (which occur when relationship-specific investments are sunk).

We consider collective choice from two alternatives. Ex ante, each agent is uncertain about which alternative she prefers, and may be uncertain about the intensity of her preferences. An environment is given by a probability distribution over utility vectors that is symmetric across agents and...

This paper reports data from a laboratory experiment on two-period moral hazard problems. The findings corroborate the contract-theoretic insight that even though the periods are technologically unrelated, due to incentive considerations principals can benefit from offering long-term contracts...

The government wants two tasks to be performed. In each task, unobservable effort can be exerted by a wealth-constrained private contractor. If the government faces no binding budget constraints, it is optimal to bundle the tasks. The contractor in charge of both tasks then gets a bonus payment...

An inventor can invest research effort to come up with an innovation. Once an innovation is made, a contract is negotiated and unobservable effort must be exerted to develop a product. In the absence of liability constraints, the inventor's investment incentives are increasing in his bargaining...