This paper shows how expected utility shortcut can result in some adversary conclusion: excessive cost. It then demonstrates graphically how Grossman and Hart (GH) have twisted the agent's model to form the principal model. A complete principal-agent model is then introduced, and is proved to be...

This paper disproves the possibility of maximizing expected utility, and shows that ordinal utility has no summit or trough either. This paper then reveals the many other mistakes committed by Shavell to suit his purpose. His proof that a loss to the principal is beneficial is a blatant lie. His...

This paper shows that international trade theory has similar dilemma like the contract theory. It then applies Walras' original law to derive two offer curves and solve the dilemma. The extension to the contract theory is simple. This model is economics meaningful, i.e., both the agent and the...

This paper solves a mathematics puzzle: how to obtain optimization result, when there is no constraint? It requires only given prices. An example for production is illustrated, and its adaption to solve the principal-agent dilemma is straightforward

This paper proves that bargaining must also be a demand and supply matter. It applies Hotelling's (1929) model to solve the bargaining problem with unique and exact solution, i.e., it exactly splits the cake. The model can be extended to include production and defection cost