1999/07/01 by Jean Tirole · 3 citations
Economics, Econometrics and Finance · Decision Sciences · Business, Management and Accounting · Engineering · #Law, Economics, and Judicial Systems #Auction Theory and Applications #Corporate Insolvency and Governance #Incomplete contracts #Transaction cost #Rationality #Complete information #Economics #Stock (firearms) #Microeconomics #Business #Political science #Law #Engineering #Incentive
paper · pdf · doi:10.1111/1468-0262.00052
openalex publication_date 1999/07/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04
The paper takes stock of the advances and directions for research on the incomplete contracting front. It first illustrates some of the main ideas of the incomplete contract literature through an example. It then offers methodological insights on the standard approach to modeling incomplete contracts; in particular it discusses a tension between two assumptions made in the literature, namely rationality and the existence of transaction costs. Last, it argues that, contrary to what is commonly argued, the complete contract methodology need not be unable to account for standard institutions such as authority and ownership; and it concludes with a discussion of the research agenda.