The Theory of Incentives: The Principal-Agent ModelEconomics has much to do with incentives not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking. In this book, Jean Jacques Laffont and David Martimort present the most thorough yet