Applied Contract Theory in Accounting & Finance
Course Number: 47719
This course covers the main applications of contract theory and information economics, focusing on the business fields of accounting and finance. We start with two essential information-based economic problems moral hazard and adverse selection respectively and focus on how contracts are designed to address trade-offs the problems induce. After this general introduction, we explore applied problems which have their roots in these two basic problems. Examples are (1) incentive cost and debt contracting in corporate finance, (2) monitoring incentives in team work; (3) capital budgeting and communication in decentralized organizations; and other possible applications.
Academic Year: 2022-2023
Semester(s): Mini 2