This section features information about the portions covered in the primary textbook. It also offers lists of additional references and papers.
Textboook
The primary book for this course is:
Bolton, Patrick, and Mathias Dewatripont. Contract Theory. Cambridge, MA: MIT Press, 2005. ISBN: 9780262025768.
We will cover the following sections in detail:
- Static bilateral contracting (adverse selection, screening, signaling, moral hazard). Chapters 2-4, 6.
- Static multilateral contracting. Chapters 7, 8.
- Dynamic contracting. Chapters 9, 10.
- Incomplete contracts. Chapters 11-13.
We will also cover these topics in the course:
- Theory of auctions (optimal auctions in particular: Myerson, Cremer-McLean)
- Mechanism design (auctions, general incentive schemes, generalized VCG mechanism in particular)
- Implementation theory
- Dynamic agreements (collusion schemes in particular)
We will overlook these areas:
- Theory of organizations
- Bargaining
- Political institutions
- Capital markets (or other direct applications to finance...)
- Behavioral models
Textbooks for Additional References
Mas-Colell, Andreu, Michael D. Whinston, and Jerry R. Green. Microeconomic Theory. New York, NY: Oxford University Press, 1995. ISBN: 9780195102680.
Fudenberg, Drew, and Jean Tirole. Game Theory. Cambridge, MA: MIT Press, 1991. ISBN: 9780262061414.
Krishna, Vijay. Auction Theory. San Diego, CA: Academic Press, 2002. ISBN: 9780124262973.
Hart, Oliver D. Firms, Contracts, and Financial Structure. Oxford, UK: Clarendon Press; New York, NY: Oxford University Press, 1995. ISBN: 9780198288817.
Laffont, Jean-Jacques, and Jean Tirole. A Theory of Incentives in Procurement and Regulation. Cambridge, MA: MIT Press, 1993. ISBN: 9780262121743.
Salanié, Bernard. The Economics of Contracts: A Primer. 2nd ed. Cambridge, MA: MIT Press, 2005. ISBN: 9780262195256.
General List of Papers
References (PDF)