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am 28. Oktober 1999
Salanie's book covers the standard areas of contract theory; adverse selection, moral hazard, signalling etc, along with chapters on the dynamics of complete contracts, incomplete contracts and a final chapter on the empirical work on contracts. The material on dynamics and incomplete contracts is most welcome as many other books in this area do not cover it. Perhaps more space could have been given over to incomplete contracts given the increasing importance of them.
The book manages to cover a large amount of material in a relatively small number of pages, it is just over 200 pages. Most of this material is presented in an accessible and readable manner and most graduate students in economics should be able to read the book.
The most obvious problem with the book is the number of small errors it contains. Some of the figures have points that are in the wrong place; there are a number of what look like typos in the text, being told that an indifference curve goes through a point (q2,t2) when in fact it goes through (q1,t1) for example. While these are only minor problems they do distract from the otherwise good impression that the book makes.
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I loved that book because it explains the theory of contracts in an easy way buy with no lack of formality
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