From Walrasian General Equilibrium to Incomplete Contracts: Making Sense of Institutions

Mehrdad Vahabi

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Abstract: This article explores the specific contribution of recent literature on incomplete contracts in comparison with the acontractual Walrasian general equilibrium as well as the complete optimal contracts of the Agency theory regarding the institutional identity of agents. It underlines a tension between the theoretical justification of contractual incompleteness on the one hand, and rationality postulate, on the other hand. It concludes the relevance of bounded rationality assumption and temporary equilibrium framework to overcome some logical incoherences of present incomplete contracts literature. This brings closer two important branches of new institutional economics, namely the Transaction Costs Economics and the Property Rights approach.

Keywords: New institutional economics; Walrasian General Equilibrium; agency theory; incomplete contracts; nouvelle économie institutionnelle; équilibre général walrasien; théorie de l'agence; contrats incomplets (search for similar items in EconPapers)
Date: 1999-01
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03704424
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Citations: View citations in EconPapers (2)

Published in 1999

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Related works:
Working Paper: From Walrasian general equilibrium to incomplete contracts: making sense of institutions (2002)
Working Paper: From Walrasian General Equilibrium to Incomplete Contracts: Making Sense of Institutions (1999)
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