Contract theory: Contract theory is the study of how people and organizations construct and develop legal agreements. It is based on the idea that contracts are designed to achieve efficiency by aligning the incentives of the parties involved. Contract theory is a branch of economics that studies how economic actors can and do construct contractual arrangements, generally in the presence of information asymmetry. See also Information asymmetry, Contracts._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. |