# Questions tagged [contracts]

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### Equation for pure wage contracts in the land market

I am reading "Development Economics" by Debraj Ray. I need to understand the different kinds of contracts in the land market. Chapter 12.3.1 explains the contract forms. The general equation ...
29 views

### Cryptocurrency perpetual futures shorting mechanism

I am trying to understand shorts in a perpetual futures market. Let's consider a market of ETH/USDC, trading at 1000 USDC. When user A shorts 1 perp (assuming no leverage) they pay 1000 USDC, the ...
76 views

### Lab experiments for a course in standard contract theory

I am teaching a course in contract theory based on the textbooks by Bolton/Dewatripont and Laffont/Martimort. I would like to briefly present some lab experiments to illustrate basic insights of ...
• 101
60 views

### Obtaining value from knowledge of how to manage a property you don't own

Suppose there are two firms A and B. Firm A owns property P, such as an apartment building. There are two possible mutually exclusive actions that can be taken in the management of P: action X and ...
• 131
1 vote
46 views

### Multicollinearity problem

I am trying to model contract outcomes, let's say for car sales and I am interested if a certain group of people is better in negotiating better deals (e.g. women). The dependent variable is price, ...
1 vote
2k views

### How does a perpetual futures contract affects the price of the underlying?

As long as I understand, a futures contract is kind of a prediction for the underlying's price at the time when it expires. But what happens if this futures contract is perpetual, and doesn't have a ...
528 views

### Relation between incomplete contracting and the principal agent problem?

I have read about incomplete contracts in the context of vertical integration of firms, in which the two contracting parties are relatively "symmetric" (we cannot say that one is the agent and the ...
• 133
224 views

### Are there "Grossman/Hart/Moore" models without efficient negotiation outcomes?

Sanford Grossman, Oliver Hart, and John Moore have developed a theory of the firm based on incomplete contracting (Hart was awarded the Nobel Prize in 2016 for this branch of the literature). In the ...
• 23
1 vote
1k views

### No competitive equilibrium for pooling contracts

In class we dealt with insurance economics and, specifically, adverse selection due to information asymmetry. As one possible solution we considered pooling contracts, i.e. the same contract for both ...
• 197