Organisations increasingly use digital nudges to influence their workforces’ behaviour without coercion or incentives. This can expose employees to arbitrary domination by infringing on their autonomy through manipulation and indoctrination. Nudges might furthermore give rise to the phenomenon of “organised immaturity.” Adopting a balanced approach between overly optimistic and dystopian standpoints, I propose a framework for determining the moral permissibility of digital nudging in the workplace. In this regard, I argue that not only should organisations provide pre-discursive justification of nudges but they should also ensure that employees can challenge their implementation whenever necessary through legitimation procedures. Building on Rainer Forst’s concept of the right to justification, this article offers a way to combine contract- and deliberation-based theories for addressing questions in business ethics. I further introduce the concept of meta-autonomy as a capacity that employees can acquire to counter threats of arbitrary domination and to mitigate organised immaturity.

This article outlines two models of constructing contract theory: The impinging model (based on metaethical cognitivism), which gives central place to truth and justification; and the projectivist model (based on metaethical non-cognitivism), which gives central place to attitudes and motivation. It is argued that modern contract theories which typically seek to present the whole body of contract doctrine as deducible from, and morally justifiable by, one or a small number of apex principles, presuppose the impinging model. By contrast, a projectivist approach to theory creation does not purport to offer justificatory apex principles, but rather argues for propositions that are likely to have maximum motivational purchase in the practical reasoning of contract law’s subjects. The article then goes on to point out the theoretical cost of the impinging model and argues that projectivist accounts do a better job of accommodating the internal point of view of contract law’s subjects.

Relational contract theory holds that the interpretation of a contract must take full account of the context and surrounding circumstances of the parties’ bargain so as to give effect to their respective intentions. This paper argues that if a relational treatment of contracts is to be institutionalised, in the sense of being utilised in a contract dispute to determine and give effect to the parties’ intentions, then it must operate at an abstract level. That is to say, rather than using relevant context to determine what the actual parties intended in the circumstances at hand, the contextualist enquiry should ascertain the relevant context by reference to what the parties would have agreed to in the circumstances, had they properly reflected on what their self-interest requires. I discuss the merits of this proposition by reference to a number of appellate judgments, which already endorse contextualism as a response to contractual ambiguity, and I ultimately apply it to the Supreme Court's judgment in Rainy Sky SA v Kookmin Bank.

This paper enters the dispute over the proper interpretation of the expectation measure of damages in contract law. Should damages be measured by the plaintiff’s financial loss or by the cost of acquiring a substitute performance (“cost of cure”)? I begin by presenting a moral (as opposed to an economic or a pragmatic) justification for the traditional contract principle that a plaintiff has a right to compensation for the financial loss flowing from breach but no right to performance. I do so by showing that implicit in the principle that the plaintiff has a right to compensation for financial loss alone is a conception of moral agency as a capacity for detachment from things. Through an exploration of Henry James’ novel The Ambassadors, I try to show what is valuable in that conception, although I argue that it is, in the end, incomplete. Then I consider the self-authorship conception of moral agency implicit in the moralist’s proposal to replace the financial loss remedy with a right to performance or to compensation for the cost of securing a substitute performance. Again, through a reading of James’ novel, I try to show what is valuable in this conception although I argue that it too is incomplete. I suggest that the conceptions of moral agency respectively implicit in the financial loss and cost of cure remedies are constituent parts of a complete conception. Once we see this, we arrive at a moral justification for a contract law which treats compensation for financial loss as the normal rule but exceptionally allows for a remedy that aims at securing performance.

International cooperation often requires costly policy adjustments. States may worry, however, that such adjustments weaken their outside options, and thus reduce their bargaining power. How does uncertainty about the effects of policy adjustments on outside options influence the depth of cooperation that states can achieve? My game-theoretic analysis shows that uncertainty about outside options is an obstacle to deep cooperation. If states agree on deep cooperation, they have to compensate vulnerable states with weak outside options for their losses. Under uncertainty, states that are not vulnerable have an incentive to falsely claim that they are vulnerable (i) to avoid a side payment or (ii) to obtain compensation for being vulnerable. The result holds even if the added value of deep cooperation would be large enough to fully compensate the losers. In equilibrium, the more vulnerable state sometimes offers a side payment to the less vulnerable one. More broadly, the analysis reveals a new international cooperation problem and provides a new rationale for costly signaling mechanisms and delegation to international organizations.

Annual revenue flow to developing countries for ecotourism could be as large as US$ 29 billion, providing an enormous financial incentive against habitat loss and exploitation. However, surprisingly little quantitative evidence exists on the profitability of the rainforest ecotourism sector, which determines the incentive and capacity of the sector to engage in conservation. A Peruvian rainforest ecotourism cluster generated US$ 11.6 million in 2005. The after-tax profit margin was at least 14% and has increased with tourist volume. High profitability, coupled with new legislation, has allowed operators to put 54 358 ha of rainforest near the new Interoceánica Sur highway under private management and to engage in conservation actions. A previously published microeconomic contract model of protected-areas management identifies two key features of rainforest tourism that link ecotourism to conservation: (1) tourists demand an immersive experience, which incentivizes the acquisition of large amounts of forest cover, and (2) institutional reforms have increased the expected effectiveness of conservation actions. In Peru, these conditions appear to be met, so that profits from ecotourism can combine with new land tenure rights to create a governance structure within which the industry can act as an independently financed partner to the conservation community.

Roger Guesnerie is a prominent economic theorist. Among his many honors and distinctions, he is a Foreign Member of the American Academy of Arts and Science and an Honorary Foreign Member of the American Economic Association; he has been a President of the European Economic Association and of the Econometric Society. Currently a Professor at the College de France, he has made fundamental contributions to second-best theory and public economics, information economics, and rational expectation theory.

Guesnerie was one of the founding fathers of second-best theory. His contributions to public economics, addressing issues such as nonconvex economies and especially taxation in a second-best context, remain absolute references on these topics; more recently, he has provided an in-depth analysis of issues related to climate change and global warming from a public economics perspective. Regarding contract theory, his work with Jean Jacques Laffont has considerably extended our understanding of the properties of the basic models, as well as the set of tools that economists can use to address these problems. Finally, Guesnerie's work has been influential in the critical reassessment of rational expectation theory that took place over the last decades. On one hand, he has been a prominent figure in the development of so-called “sunspot” models, which reconcile the Keynesian notion of “animal spirits” with the formal requirements of rational expectations. On the other hand, he has provided path-breaking discussions of the theoretical relevance of rational expectation theory, based on a detailed assessment of the coordination between individual expectations that is implicit in the concept. In some classes of models, Guesnerie argues, rational expectation equilibria constitute a natural outcome, because coordination can be achieved either through “eductive” reasoning (for which common knowledge of individual rationality is sufficient) or as the product of simple evolutionary or learning dynamics (and in general in both ways). In other cases, however, such arguments do not appear to support the rational expectations solution, and its relevance is therefore much less obvious. On a more institutional side, Guesnerie has created the doctoral program “Analyse et Politique Economique” at the Ecole des Hautes Etudes en Sciences Sociales; besides this program, in 1989, several related research centers in Paris merged into Delta, which Guesnerie chaired between 1992 and 2000, and then into the Paris School of Economics (PSE), at which Guesnerie is Chairman of the Board.

This interview with Roger Guesnerie gives an opportunity to discuss further the current situation of economic theory and economics in general, as well as to compare the European and American traditions in economics.

We study the impact that financial intermediation can have on productivity through the alleviation of credit constraints in occupation choice and/or an improved allocation of risk, using both static and dynamic structural models as well as reduced-form OLS and IV regressions. Our goal in this paper is to bring these two strands of the literature together. Even though, under certain assumptions, IV regressions can accurately recover the true model-generated local average treatment effect, this is quantitatively different, in order of magnitude and even sign, from other policy impact parameters (e.g., ATE and TT). We also show that laying out clearly alternative models can guide the search for instruments. On the other hand, adding more margins of decision, that is, occupation choice and intermediation jointly, or adding more periods with promised utilities as key state variables, as in optimal multiperiod contracts, can cause the misinterpretation of IV as the causal effect of interest.

Foreign direct investment forms an ever more important part of globalised market structures, and international investment law has become one of the most successful and judicialised areas of public international law. In order to attract investment, States commit themselves to treaties that restrict their regulatory sovereignty in ways that are sometimes unpredictable, owing to vague terms in the treaties and the broad use by investment tribunals of their delegated discretion.

This article uses economic contract theory in order to understand whether the commitment problem ex ante and the flexibility problem ex post are optimally solved. It is hypothesised that the participation constraints on States may be overlooked by investment tribunals, thereby leading to an undesired weakening of protection of investors in the long run due to reactions by States. First, States may opt out of the system, for example by exiting treaties or by non-compliance. Second, they may also water down the substantive or procedural protections. Third, whereas investment treaties were seen in the beginning as a restraint on developing countries, investment increasingly flows to equally highly regulated developed countries. As legal protection is reciprocal but the capital flows used to be unilateral, developed countries might also react to their restriction of sovereignty, as the United States has already done, for example. These perils could lead to a backlash in international investment protection of which indications are already visible

Ce papier aborde la question de la subsidiarité dans le cadre de la Politique Agricole Commune. L'instrument privilégié est ici un contrat de gel de terre dont la définition relève soit directement des instances de l'Union Européenne, soit des instances nationales. Dans ce dernier cas, dit de subsidiarité, le budget public associé aux contrats est supporté par les budgets nationaux. Les contrats sont déterminés dans les deux types d'intervention publique, nationale et européenne. Dans le cas d'une politique de subsidiarité, les contrats nationaux sont définis par un équilibre de Nash résultant d'un jeu intra-européen. On ne peut déterminer analytiquement la politique qui domine l'autre en terme de welfare, sauf dans le cas très particulier d'Etats « identiques ». Dans ce cas, la politique commune domine la po-litique de subsidiarité. Toutefois le cadre théorique élaboré est propice à l'analyse empirique. Pour illustrer cette démarche, une analyse quantitative est proposée pour le secteur du blé tendre dans l'Union Européenne à 12 selon des données de 1994. Elle permet la comparaison des gains pour les producteurs, les consommateurs, et les contribuables des 12 pays dans les 3 situations offertes successivement par l'état de référence, la politique commune de gel de terre et la politique de subsidiarité.

In this study, the remuneration system applied in the French Guyana shrimp fishery is analyzed in relation to the market changes that this fishery has experienced since 1985. The contract used for the crew members is not the classical share contract usually observed in fisheries. It is a piece rate wage with quality-bonuses. In the classical contract theory literature the piece rate contract is thought to avoid effort shirking but to induce quality shirking. The bonuses are introduced here in order to limit the quality shirking which may occur during grading and storing operations on board. The skippers' contract also differs from the share contract. It is based on remuneration parameters controlled by the companies. By changing these parameters between 1987 and 1991, the companies led the skippers to modify their fishing strategies and especially to concentrate their efforts towards small sized shrimp. The companies thus became able to respond to the increasing demand for small shrimp categories which characterises the French market. The evolution of the spatial distribution of the fleet effort over the same period is consistent with this hypothesis: the fleet has moved towards fishing zones where small shrimp are known to be in abundance.