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What is the economics of contracting?

This chapter, The Economics of Contracting, introduces Nobel Prize-winning economic research that cannot be ignored in today’s dynamic and risky contracting environment and goes to the heart of the economic rationale that underpins every contract.

What do you need to know about contract economics?

Here’s what you need to know. What is contract economics? Contract economics is the study of what adds or reduces the cost of the contracting process. It also shows how you can measure and optimize your contracting processes.

What is contract theory?

Because of its connections with both agency and incentives, contract theory is often categorized within a field known as law and economics. One prominent application of it is the design of optimal schemes of managerial compensation.

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