The Many Legal Institutions that Support Contractual Commitments

Gillian K. Hadfield
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Gillian K. Hadfield: University of Southern California

Chapter 8 in Handbook of New Institutional Economics, 2008, pp 175-203 from Springer

Abstract: The problem of enforcing agreements in exchange is at the heart of economic life and has been a central topic for economic theory in the past several decades. As economists have focused more closely on what goes on inside the ‘black box’ of the firm, especially under conditions of uncertainty and asymmetric information, the role of contractual commitment in economic organization has come to the fore. Much of the theory of incentives that has emerged since the 1970s depends crucially on assumptions about the enforceability of contractual mechanisms designed to align the interests of principal and agent and achieve efficient production and exchange (Laffont and Martimort 2002).

Keywords: Transition Economy; Legal Rule; Civil Code; Legal Institution; Legal Reasoning (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1007/978-3-540-69305-5_9

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