From Walrasian general equilibrium to incomplete contracts: making sense of institutions

Mehrdad Vahabi

MPRA Paper from University Library of Munich, Germany

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: Incomplete contracts; Judge bounded rationaly, Agent's bounded rationality, Asymmetric information, Walrasian general equilibrium (search for similar items in EconPapers)
JEL-codes: D02 D23 D86 K12 (search for similar items in EconPapers)
Date: 2008-08, Revised 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Economie et Institutions No. 1.Vol 1(2002): pp. 99-143

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Related works:
Working Paper: From Walrasian General Equilibrium to Incomplete Contracts: Making Sense of Institutions (1999)
Working Paper: From Walrasian General Equilibrium to Incomplete Contracts: Making Sense of Institutions (1999)
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