Testing Contract Theory: A Survey of Some Recent Work
45 Pages Posted: 13 Sep 2002
Date Written: June 2002
While the theoretical literature on contracts has been enormous since the seventies, empirical tests of the theory have long remained scarce. However, new empirical work has been developed in the last ten years that sheds light on the empirical validation of the theory. This paper aims at surveying the recent empirical work on contracts. The focus throughout is on the need to properly account for unobserved heterogeneity.
JEL Classification: D8, C5
Suggested Citation: Suggested Citation