<blockquote>
  <p>Just a model that can be used to state how (in)complete a particular contract is, whatever the reason.</p>
</blockquote>

<ul>
<li>I remember a debate at the end of the 90's on <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0262.00052" rel="noreferrer">Incomplete Contracts: Where do We Stand?</a> by Jean Tirole and <a href="https://www.nber.org/papers/w6726.pdf" rel="noreferrer">Foundations of Incomplete Contracts</a> by Hart and Moore, where they develop a model that provides a rigorous foundation for the idea that contracts are incomplete, followed by <a href="http://Complexity%20and%20Renegotiation:A%20Foundation%20forIncomplete%20Contracts" rel="noreferrer">Complexity and Renegotiation: A Foundation for Incomplete Contracts</a> by Segal.</li>
<li>Check also this book <a href="https://global.oup.com/academic/product/the-impact-of-incomplete-contracts-on-economics-9780199826223?cc=fr&amp;lang=en&amp;" rel="noreferrer">The Impact of Incomplete Contracts on Economics</a> (2006) by Aghion, Dewatripont, Legros, and Zingales, including <a href="http://Comments%20on%20the%20Foundations%20ofIncomplete%20Contracts" rel="noreferrer">Comments on the Foundations of Incomplete Contracts</a> by Maskin.</li>
<li>An interesting paper by Tirole <a href="http://chrome-extension://oemmndcbldboiebfnladdacbdfmadadm/http://econ.lse.ac.uk/staff/lfelli/teach/TiroleAER09.pdf" rel="noreferrer">Cognition and Incomplete Contracts</a>: Thinking  about  contingencies,  designing  covenants,  and  seeing  through  their implications is costly. Parties to a contract accordingly use heuristics and leave it incomplete. The paper develops a model of limited cognition and examines its consequences for contractual design.</li>
</ul>

CC BY-SA 4.0
2019-04-21T08:39:10.453Z
2019-04-21T08:39:10.453Z
emeryville
<p>I have read various articles about incomplete contracts, like Hart's papers and Milgrom's papers.</p>

<p>But I have not found a paper that defines mathematically, in the most general way possible, what an contract is, and how a contract can be more, or less, "incomplete".</p>

<p>Is there a general model that has as special cases the incomplete contracts studied in the literature (e.g. by Hart, Incomplete Contracts and the Theory of the Firm, and others), and perhaps also as special case the complete contracts?</p>

<p><strong>Note:</strong> I am not necessarily asking for a general model that can include all the <strong>reasons</strong> for incomplete contracts (thought that would be nice too). Just a model that can be used to state how (in)complete a particular contract is, whatever the reason.</p>

<microeconomics><principal-agent><contract-theory>
General mathematical model of incomplete contracts?
user8301
# General mathematical model of incomplete contracts?

(Asked by: username_0 on 2019-04-21)

I have read various articles about incomplete contracts, like Hart's papers and Milgrom's papers.

But I have not found a paper that defines mathematically, in the most general way possible, what an contract is, and how a contract can be more, or less, "incomplete".

Is there a general model that has as special cases the incomplete contracts studied in the literature (e.g. by Hart, Incomplete Contracts and the Theory of the Firm, and others), and perhaps also as special case the complete contracts?

**Note:** I am not necessarily asking for a general model that can include all the **reasons** for incomplete contracts (thought that would be nice too). Just a model that can be used to state how (in)complete a particular contract is, whatever the reason.

**Tags:** microeconomics, principal-agent, contract-theory

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## 1 answers

### Answer by username_1 on 2019-04-21. Score: 5

> Just a model that can be used to state how (in)complete a particular contract is, whatever the reason.

* I remember a debate at the end of the 90's on [Incomplete Contracts: Where do We Stand?](https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0262.00052) by Jean Tirole and [Foundations of Incomplete Contracts](https://www.nber.org/papers/w6726.pdf) by Hart and Moore, where they develop a model that provides a rigorous foundation for the idea that contracts are incomplete, followed by [Complexity and Renegotiation: A Foundation for Incomplete Contracts](http://Complexity%20and%20Renegotiation:A%20Foundation%20forIncomplete%20Contracts) by Segal.
* Check also this book [The Impact of Incomplete Contracts on Economics](https://global.oup.com/academic/product/the-impact-of-incomplete-contracts-on-economics-9780199826223?cc=fr&lang=en&) (2006) by Aghion, Dewatripont, Legros, and Zingales, including [Comments on the Foundations of Incomplete Contracts](http://Comments%20on%20the%20Foundations%20ofIncomplete%20Contracts) by Maskin.
* An interesting paper by Tirole [Cognition and Incomplete Contracts](http://chrome-extension://oemmndcbldboiebfnladdacbdfmadadm/http://econ.lse.ac.uk/staff/lfelli/teach/TiroleAER09.pdf): Thinking about contingencies, designing covenants, and seeing through their implications is costly. Parties to a contract accordingly use heuristics and leave it incomplete. The paper develops a model of limited cognition and examines its consequences for contractual design.


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