Incomplete Contracts and Ownership: Some New Thoughts

Efficiency out of Disorder — Contested Ownership in Incomplete Contracts

This paper studies the role of contested ownership in a situation where two players have to make a personand asset-specific investment, and when no complete contracts can be written. It compares contested ownership to the various ex ante ownership structures typically discussed in the literature (following the influential work by Grossman, Hart, and Moore). The paper shows that contested owners...

Incomplete Contracts and Firm Boundaries: New Directions

The seminal work by Grossman and Hart (1986 “The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration”, 94 Journal of Political Economy 691–19.) made the study of firm boundaries susceptible to formal economic analysis, and illuminated an important role for markets in providing incentives. In this essay, I discuss some new directions that the literature has taken since....

Contracts of Adhesion-Some Thoughts About Freedom of Contract

Cognition and Incomplete Contracts

Thinking about contingencies, designing covenants and seeing through their implications is costly. Parties to a contract accordingly use heuristics and leave it incomplete. The paper develops a model of limited cognition and examines its consequences for contractual design. JEL numbers: D23, D82, D86, L22.

Incomplete Contracts and Control

The work on incomplete contracts cited by the prize committee began in the summer of 1983, but it may be useful to say a bit about how I reached that point. As a graduate student, first at the University of Warwick and then at Princeton University, with a degree in mathematics behind me, I was drawn to general equilibrium theory, and my PhD thesis was on general equilibrium theory with incomple...