Contracts and Organisations

This information is for the 2021/22 session.

Teacher responsible

Prof Gilat Levy

Prof Philippe Aghion


This course is available on the MSc in Econometrics and Mathematical Economics, MSc in Economics, MSc in Economics (2 Year Programme), MSc in Environmental Economics and Climate Change and MSc in Environmental Policy, Technology and Health (Environmental Economics and Climate Change) (LSE and Peking University). This course is available with permission as an outside option to students on other programmes where regulations permit.


Students on the MSc Econometrics and Mathematical Economics programme must have completed the Pre-sessional Course for MSc EME (EC451).

All other students must have completed the Introductory Course in Mathematics and Statistics (EC400).

In exceptional circumstances, students may take this course without EC400 provided they meet the necessary requirements and have received approval from the course conveners (via a face to face meeting), the MSc Economics Programme Director and their own Programme Director. Contact the Department of Economics for more information ( regarding entry to this course.

Course content

The course will cover topics from: social learning, reputation and career concerns, strategic information transmission, contract theory, incomplete contracts, the economics of moral hazard and adverse selection in strategic settings,  dynamic theory of incentive contracts, optimal auctions and regulation, and the theory of mechanism design with multiple agents (multiple agents screening and common agency).


20 hours of lectures and 10 hours of seminars in the MT. 20 hours of lectures and 10 hours of seminars in the LT.

This course is delivered through a combination of classes and lectures totalling a minimum of 60 hours across Michaelmas Term and Lent Term. This year, some or all of this teaching will be delivered through a combination of virtual classes, live streamed (recorded) lectures, and some flipped content delivered as short online videos

Formative coursework

Two marked assignments per term.

Indicative reading

No one book covers the entire syllabus; a list of references will be provided at the start of the course. The following textbooks provide a treatment of part of the material presented in the course: Jean-Jacques Laffont, The Economics of Uncertainty and Information, MIT Press; D Fudenberg & J Tirole, Game Theory, MIT Press; Jean-Jacques Laffont & Jean Tirole, A Theory of Incentives in Procurement Regulations, MIT Press; Bernard Salanié, The Economics of Contracts: A Primer, MIT Press, Bolton, P., and M. Dewatripont (2005), Contract Theory, MIT Press, Hart, O. (1995), Firms, Contracts, and Financial Structure, Oxford University Press.


Assessment path 1
Exam (100%, duration: 2 hours, reading time: 15 minutes) in the summer exam period.

Assessment path 2
Exam (50%, duration: 2 hours, reading time: 15 minutes) in the summer exam period.
Essay (50%, 6000 words) in the ST.

MSc Econometrics and Mathematical Economics students must follow Assessment path 1.

Non-MSc Econometrics and Mathematical Economics students must follow Assessment path 2.

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Important information in response to COVID-19

Please note that during 2021/22 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the differing needs of students in attendance on campus and those who might be studying online. For example, this may involve changes to the mode of teaching delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.

Key facts

Department: Economics

Total students 2020/21: 14

Average class size 2020/21: 10

Controlled access 2020/21: Yes

Value: One Unit

Guidelines for interpreting course guide information