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CAIRO BOOKS's Description
Despite the vast research literature on topics relating to contract theory,
only a few of the field's core ideas are covered in microeconomics textbooks.
This long-awaited book fills the need for a comprehensive textbook on contract
theory suitable for use at the graduate and advanced undergraduate levels. It
covers the areas of agency theory, information economics, and organization
theory, highlighting common themes and methodologies and presenting the main
ideas in an accessible way. It also presents many applications in all areas of
economics, especially labor economics, industrial organization, and corporate
finance. The book emphasizes applications rather than general theorems while
providing self-contained, intuitive treatment of the simple models analyzed. In
this way, it can also serve as a reference for researchers interested in
building contract-theoretic models in applied contexts.The book covers all the
major topics in contract theory taught in most graduate courses. It begins by
discussing such basic ideas in incentive and information theory as screening,
signaling, and moral hazard. Subsequent sections treat multilateral contracting
with private information or hidden actions, covering auction theory, bilateral
trade under private information, and the theory of the internal organization of
firms; long-term contracts with private information or hidden actions; and
incomplete contracts, the theory of ownership and control, and contracting with
externalities. Each chapter ends with a guide to the relevant literature.
Exercises appear in a separate chapter at the end of the book.