Steven Shavell's Completely Wrong Contract Theory

2016 ◽  
Author(s):  
Hak Choi
Keyword(s):  
Contract Theory

The Economic Theory of the Firm: A Generalization

2012 ◽  
pp. 41-66 ◽  
Author(s):  
M. Storchevoy
Keyword(s):  
Economic Theory ◽  
General Theory ◽  
Contract Theory ◽  
Theory Of The Firm ◽  
Material Structure ◽  
Structural Factors ◽  
Boundaries Of The Firm ◽  
Opportunistic Behaviour ◽  
New Variant

The paper deals with development of a general theory of the firm. It discusses the demand for such a theory, reviews existing approaches to its generalization, and offers a new variant of general theory of the firm based on the contract theory. The theory is based on minimization of opportunistic behaviour determined by the material structure of production (a classification of ten structural factors is offered). This framework is applied to the analysis of three boundaries problems (boundaries of the job, boundaries of the unit, boundaries of the firm) and five integration dilemmas (vertical, horizontal, functional, related, and conglomerate).

scholarly journals Contracting for Catastrophe:Legitimizing Emergency Constitutions by Drawing on Social Contract Theory

Res Publica ◽  
2021 ◽  
Author(s):  
Stefan Voigt
Keyword(s):  
Social Contract ◽  
Contract Theory ◽  
Social Contract Theory ◽  
Constitutional Rights ◽  
State Of Emergency ◽  
Half Century ◽  
States Of Emergency ◽  
The World

AbstractStates of emergency are declared frequently in all parts of the world. Their declaration routinely implies a suspension of basic constitutional rights. In the last half century, it has become the norm for constitutions to contain an explicit ‘emergency constitution’, i.e., the constitutionally safeguarded rules of operation for a state of emergency. In this paper, I ask whether inclusion of an emergency constitution can be legitimized by drawing on social contract theory. I argue that there are important arguments, both against and in favor of constitutionalized emergency provisions, and that social contract theory—as applied by economists—can be of some help when deciding whether to have, or not to have an emergency constitution. This paper introduces a novel argument for justifying emergency constitutions. It argues that they can serve as a commitment mechanism protecting both citizens and politicians from overreacting to rare but significant threats.

scholarly journals Evaluating social contract theory in the light of evolutionary social science

2021 ◽  
pp. 1-45
Author(s):  
Paul Seabright ◽  
Jonathan Stieglitz ◽  
Karine Van der Straeten
Keyword(s):  
Social Science ◽  
Social Contract ◽  
Contract Theory ◽  
Social Contract Theory

Why do business losses cause conflict?

2018 ◽  
Vol 4 (4) ◽  
pp. 219-232
Author(s):  
Henrik Lando
Keyword(s):  
Contract Theory ◽  
Motivated Reasoning ◽  
Significant Loss ◽  
Self Image ◽  
Negative Reciprocity ◽  
Behavioral Theories ◽  
Full Rationality

Evidence suggests that conflicts between contracting parties are more prone to occur when a party has suffered a significant loss. It is argued that the phenomenon is difficult to understand within conventional contract theory, which assumes full rationality, while behavioral theories based on the concepts of motivated reasoning and reciprocity provide interesting explanations. Thus, losses can trigger motivated, self-serving perceptions and beliefs, which in turn are likely to induce negative reciprocity as well as counter-productive acts aimed at bolstering self-image. These explanations are demonstrated to be well supported by experiments.

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