Contract Theory

Contract Theory by Patrick Bolton and Mathias Dewatripont, a comprehensive textbookon contract theory suitable for use at the graduate and advanced undergraduate levels, covers theareas of agency theory, information economics, and organization theory and presents manyapplications in all areas of economics, especially labor economics, industrial organization, andcorporate finance. The exercises at the end of the book not only review, chapter by chapter, thebasic concepts introduced in the text but also explore additional ideas and applications based onteaching material accumulated over the years by the authors and other instructors of contracttheory. The solutions manual to this essential text gives complete solutions to 27 of the 54exercises in the text, allowing students to study and compare their answers and take greateradvantage of this crucial part of the book. The solutions manual follows the structure of the text,grouping exercises by chapter. Chapters 2-6 cover such static bilateral contracting problems asscreening, signaling, and moral hazard; chapters 7 and 8 treat multilateral contracting, includingauctions, bilateral trade under private information, and multiagent moral hazard; chapters 9 and 10explore problems of repeated bilateral contracting; and chapters 11-13 cover incomplete contracts,the theory of ownership and control, contracting with externalities, and common agency. ArthurCampbell, Moshe Cohen, Florian Ederer, and Johannes Spinnewijn are all Ph.D. candidates in Economicsat MIT.

Moshe Cohen is a Ph.D. candidate in Economics at MIT.