Journal of Economic Literature Vol. 52 No. 4 2014
Behavioral Contract Theory
Abstract
This review provides a critical survey of psychology-and-economics (“behavioral-economics”) 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.
- DOI
- 10.1257/jel.52.4.1075
- Volume
- 52
- Issue
- 4
- Pages
- 1075-1118
- Language
- en
- Sources
- crossref openalex