Theory of Information and Contracts: Advanced Microeconomics

Contract theory, information economics, incentive theory and organization theory have been one of the most active field of research in economics, finance and management. The goal of this class is to provide graduate students of HEC Montréal and of the joint Ph.D. program in business administration an understanding of the tools, methods and models of contract theory. Economics has much to do with incentives. The central question is what makes people act in a particular way in an economic or business situation. The focus is on the course is to the study the principal-agent model in which a principal delegates a task to another agent through the use of a contract. In particular we study adverse selection and moral hazard models in static and dynamic settings.