Contract Design I

Contract Design I is taught by Professor Alexander Stremitzer and aims to bridge the gap between economic contract theory, contract law, and the writing of real-world contracts. In this course, we take a systematic approach to contract design. This means we first analyze the economic environment in which a transaction takes place, and then engineer contracts that achieve the desired outcome. Note that this is NOT a legal drafting class that focuses on contractual language, sophisticated parties use to make courts enforce their contracts. Instead, in Contract Design I, you will learn what the content of a contract should be so that parties can reach their goals.

Please find the link to the external page course website.

Interested in Contract Design I? Watch this external page introductory video to the course!

Please find more information in the course catalogue at ETH, UZH, and UNISG.

Contracts are agreements between parties to engage in transactions. A good contract creates value by giving parties the right incentives to meet their objectives. A good contract designer scrutinizes the economic situation in which parties find themselves and tailors the contract to the challenges at hand. To help you become sophisticated contract designers, we draw from insights, for which more than half a dozen Nobel Prizes were awarded in the past two decades and transfer them to the art of writing real-world contracts. In other words, Contract Design I will provide you with analytical tools related to contracting that are invaluable to successful lawyers, business leaders, and startup founders.

In Contract Design I, you will be asked to watch a series of videos (10-15 minutes each) that we produced for this course. These video episodes introduce you to key concepts of economic, behavioral, and experimental contract theory. We will cover topics such as moral hazard, adverse selection, elicitation mechanisms, relationship-specific investments, and relational contracting. However, this course prioritizes applications of contract design. Therefore, we will use class time to discuss a selection of exciting real-world case studies, ranging from purchases & sales of assets, oil & gas exploration, movie production & distribution, construction & development, M&A deals, venture capital financing, to executive compensation and many other types of transactions.