Complete Contracts: Roomate Agreement Edition

15 November 2011 at 12:12 pm 4 comments

| Peter Klein |

Contractual completeness is a core issue in organizational economics. A colleague helpfully suggested this illustration of a nearly complete contract. Note the deliberate omission of language dealing with an extreme low-probability event (time for Nicolai and Scott to resume their debate over bounded rationality?).

Entry filed under: - Klein -, New Institutional Economics, Strategic Management, Theory of the Firm.

CFP: ISNIE 2012 Shakespeare and Epistemology

4 Comments Add your own

  • 1. Scott Masten  |  15 November 2011 at 12:32 pm

    I’m game if Nicolai is!

  • 2. Rafe’s Roundup Boston edition at Catallaxy Files  |  15 November 2011 at 10:26 pm

    […] Klein has a post on contractual completion, with a nice bit of Youtube to illustrate the complications that can […]

  • 3. Michael Marotta  |  17 November 2011 at 9:00 pm

    Just that Big Bang Theory ran and still runs and garners awards offers opportunity for sociologists. Some on the fan sites worry that it slid from being a comedy for nerds, to being a comedy about nerds, to just being another sitcom sandbagging the ratings with bathroom jokes. I see its success in the fact that 28% of working Americans have bachelor’s degrees. This show runs on CBS in prime time, not midnights on the Syfy Channel. Even after it goes off the air – as all shows must – it will remain a classic. What will be interesting will be to consider what life will be like in the future when this show is outdated.

  • 4. Juan M  |  20 November 2011 at 12:05 pm

    Did you watched the chapter where Leonard explained Penny the negociation process?

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