Abstract (may include machine translation)
This review provides a critical survey of psychology-and-economics ("behavioraleconomics") research in contract theory. First, I introduce the theories of individual decision making most frequently used in behavioral contract theory, and formally illustrate some of their implications in contracting settings. Second, I provide a more comprehensive (but informal) survey of the psychology-and-economics work on classical contract-theoretic topics: moral hazard, screening, mechanism design, and incomplete contracts. I also summarize research on a new topic spawned by psychology and economics, exploitative contracting, that studies contracts designed primarily to take advantage of agent mistakes.
Original language | English |
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Pages (from-to) | 1075-1118 |
Number of pages | 44 |
Journal | Journal of Economic Literature |
Volume | 52 |
Issue number | 4 |
DOIs | |
State | Published - 1 Dec 2014 |