Social Norms, Bounded Rationality and Optimal Contracts

1. Front Matter

   Pages i-ix

   PDF

2. Introduction

   • Suren Basov

   Pages 1-13

3. Ambiguity, Robustness, and Contract Design

   • Suren Basov

   Pages 15-33

4. Evolution of Preferences, Social Norms, and Decision Rules

   • Suren Basov

   Pages 35-56

5. Complexity Constraints and Optimal Contracts

   • Suren Basov

   Pages 57-68

6. Probabilistic Choice and Optimal Contracts

   • Suren Basov

   Pages 69-106

7. Bounded Rationality, Learning, and Optimal Contracts

   • Suren Basov

   Pages 107-117

8. Social Norms and Optimal Contracts

   • Suren Basov

   Pages 119-146

9. Miscellaneous Models

   • Suren Basov

   Pages 147-167

10. Conclusions and Directions for Further Research

    • Suren Basov

    Pages 169-176

This book investigates the ways in which social norms and bounded rationality shape different contracts in the real world. It brings into focus existing research into optimal contracts, draws important lessons from that research, and outlines prospects for future investigation.
Bounded rationality has acknowledged effects on the power of incentive provisions, such as deviations from sufficient statistic theorem, the power of optimal incentives, and the effects of optimal contracts in multicultural environments. The introduction of social norms to bounded rationality opens up new avenues of investigation into contracts and mechanism design.
This book makes an important contribution to the study of bounded rationality by pulling together many separate strands of research in the area of mechanism design, and providing detailed analysis of the impact of societal values on contracts.

• Auction Theory
• Behavioral Economics
• Bounded Rationality
• Boundedly Rational Agent
• Contract Theory
• Decision Theory
• Economic Equilibrium
• Economic Theory
• Economic Uncertainty
• Game Theory
• Imperfect Information
• Incomplete Contracts
• Mechanism Design
• Opportunity Cost
• Optimal Contracts
• Optimal Decision
• Revelation Principle
• Revenue Equivalence
• Social Norms
• Utility Maximization

• Deakin University, Center for Economics and Financial Econo, Burwood, Australia

  Suren Basov

Suren Basov is a visitor to the Centre for Economics and Financial Econometrics at Deakin University, Australia. His research interests lie in the areas of mechanism design, with a particular emphasis on multidimensional screening models, the theory of bounded rationality, and evolutionary game theory. He also does research in the areas of directed search and unemployment, and incentive provision within clubs, with a particular application to Islamic finance.

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