Module Handbook

  • Dynamischer Default-Fachbereich geändert auf WIW

Module WIW-IOE-VT-M-7

Contract Theory (M, 4.5 LP)

Module Identification

Module Number Module Name CP (Effort)
WIW-IOE-VT-M-7 Contract Theory 4.5 CP (135 h)


CP, Effort 4.5 CP = 135 h
Position of the semester 1 Sem. in SuSe
Level [7] Master (Advanced)
Language [EN] English
Module Manager
Area of study [WIW-IOE] Microecomonics
Reference course of study [WIW-88.21-SG#2009] M.Sc. Business Studies (2009) [2009]
Livecycle-State [NORM] Active


Type/SWS Course Number Title Choice in
Presence-Time /
SL SL is
required for exa.
PL CP Sem.
Contract Theory
P 45 h 90 h - - PL1 4.5 SuSe
  • About [WIW-IOE-VT-K-7]: Title: "Contract Theory"; Presence-Time: 45 h; Self-Study: 90 h

Examination achievement PL1

  • Form of examination: written exam (Klausur) (90 Min.)
  • Examination Frequency: Examination only within the course
    Written exam (90 min.) or oral exam

Evaluation of grades

The grade of the module examination is also the module grade.

90 min. written exam or (depending on the number of participants) oral exam


How can economic actors overcome incentive problems, which may be caused by diverse factors e.g. asymmetric information?

Central Topics:

  • Principal-Agent Models
  • Incentive Constraints and Participation Constraints
  • Hidden Information: Lemons-Problem, Screening, Self-Selection, Signalling
  • Hidden Actions: Risk Premium, Limited Liability, Team-Problems
  • Dynamic Extensions and Tournaments
  • Applications in Industrial Economics and Finance

Competencies / intended learning achievements

On successful completion of the module students are able to
  • assess incentive problems at the conclusion of a contract
  • recommend possible contract designs
  • evaluate different incentive mechanisms
  • contrast the consequences of specific contract designs


  • Laffont, J.-J., Martimort, D. (2001): The Theory of Incentives: The Principal-Agent Model. Princeton University Press. Princeton und Woodstock.


  • Lecture documents
  • Problem sets

Requirements for attendance of the module (informal)

A course in Microeconomics and Game Theory, analytic thinking

Requirements for attendance of the module (formal)


References to Module / Module Number [WIW-IOE-VT-M-7]

Course of Study Section Choice/Obligation
[SO-88A.646-SG] M.A. Integrative Social Science [Specialisation] Politik, Wirtschaft, Ethik [WP] Compulsory Elective
[SO-88A.646-SG] M.A. Integrative Social Science [Section (non-specific)] M.A. Integrative Sozialwissenschaft (ab WS 20/21) [WP] Compulsory Elective
[MAT-88.B84-SG] M.Sc. Actuarial and Financial Mathematics [Core Modules (non specialised)] Financial Economics [WP] Compulsory Elective
Module-Pool Name
[GS-CVT-BS-2022-E-MPOOL-6] Catalog Electives Business Studies and Economics 2022
[WIW-EIE-MPOOL-7] Field of Specialization: Environmental and Industrial Economics
[WIW-ET-MPOOL-7] Field of Specialization: Economic Theory
[WIW-FE-MPOOL-7] Field of Specialization: Financial Economics
[WIW-IOE-MPOOL-7] Field of Specialization: Industrial Economics