Foundations of Incomplete Contracts
Harvard University - Department of Economics; National Bureau of Economic Research (NBER)
University of Edinburgh - Economics; London School of Economics
NBER Working Paper No. w6726
In the last few years a new area has emerged in economic theory, which goes under the heading of However, almost since its inception, the theory has been under attack for its lack of rigorous foundations. In this paper, we evaluate some of the criticisms that have been made of the theory, in particular, those in Maskin and Tirole (1998a). In doing so, we develop a model that provides a rigorous foundation for the idea that contracts are incomplete.
Number of Pages in PDF File: 50
Date posted: August 30, 2000