Making the Case for Contract Theory

4 Pages Posted: 12 Aug 2011

See all articles by Oliver Hart

Oliver Hart

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Date Written: 2010


Economics has changed a great deal in the last thirty years and there is every reason to think that the changes in the next twenty to thirty years will be at least as great. Although theory may not be as prominent as it once was, it remains essential for understanding the (increasingly) complex world we live in. One cannot analyze the bewildering amount of data now available, or make sensible policy recommendations, without the organizing framework that theory provides. Contract theory is a good example of an area where great progress has been made in the last thirty years, and yet where much remains to be done. In this short essay I will discuss some of the major themes of contract theory and also issues that are still not well understood.

Suggested Citation

Hart, Oliver D., Making the Case for Contract Theory (2010). American Economic Association, Ten Years and Beyond: Economists Answer NSF's Call for Long-Term Research Agendas, Available at SSRN: or

Oliver D. Hart (Contact Author)

Harvard University - Department of Economics ( email )

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