Decision Making in Efficient Investment Contracts and Its Determinants
|Author:||Bc. Ondřej Benáček|
|Year:||2005 - summer|
|Leaders:|| † doc. Ing. Jiří Havel CSc.
|Work type:|| Bachelors
|Awards and prizes:||B.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good bachelors diploma thesis|
|Abstract:||During the last decade there has been a large upsurge in the development of the institutional and behavioural theories applied into the fields of law and economics. Most topics, which have been assumed for centuries to be purely an exclusive monopoly in one of these social and methodological streams, have become closely intertwined. Naturally, many of these new theoretical outcomes in this field are still pending their general acceptance as permanent advances in the social science. Economics of Contracts became a niche of the law-and-economics where the recent advances have been some of the most pronounced.
The research studied in this paper deals with the analysis of the less known areas of contracting. We commenced with a general model of contracts within a standard legal framework aimed to be a safeguard against contract failures. However, since the decision-making in modern societies cannot rely on conditions of perfect markets and contracts cannot but remain incomplete, we expanded the model for sub-optimal conditions of information asymmetry and rising transaction costs. Then we concentrated on a general survey of the factors influencing the behaviour of agents in such an environment, with the stress laid on securing instruments under conditions of risk aversion and risk neutrality. At the end, we tested the expanded model of imperfect contracts by cross-referencing its assumptions and conclusions with an empirical evidence from the more recent Czech legal environment.
|Downloadable:|| Ondřej Benáček