This book on the economic theory of contracts and incentives consists of three parts. In Part I, it is illustrated how the organization of economic activities can be studied from a contract-theoretic point of view. In Part II, the robustness of adverse selection models is studied, where an uninformed principal makes a contract offer to privately informed agents. In Part III, it is demonstrated that legal restrictions on the freedom to contract can sometimes be socially desirable, even in the absence of negative externalities on third parties.
