Modern institutional economics witnesses a merging of formal and informal strands of theorizing. This development has offered new and vigorous perspectives which avoid both arbitrariness and theoretical sterility. The essays on contract theory gathered here exemplify this development. They propone new results on central issues in contractual theorizing. The theory of the firm in its variegated aspects forms, naturally, the core of the present set of contributions. Issues of ownership, integration, delegation, and finan­ ce are analyzed. Some contributions use the theoretical approach of contract theory to explore other issues, like medical care, public good problems, the economics of crime, environmental economics, and international trade. The contributors are leading young economists. They have participated in one or se­ veral classes of the 'International Summer School on the New Institutional Economics' which has been organized by Rudolf Richter in the years 1988 through 1994 and is now continued by Urs Schweizer. The theoretical style of these contributions has been influ­ enced by this experience. This collection of essays is intended to express the thanks of the contributors to Rudolf Richter. His initiatives for scholarly instruction and for inter­ national exchange of ideas have helped to create and to diffuse the understanding of and the engagement for the new institutional economics in Europe.

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Debt as an Option to Own in the Theory of Ownership Rights.- Asymmetric Information and the Horizontal Integration of Firms.- Short-Termism and the Market for Corporate Control.- The Influence of Transaction Costs in Labor Markets on the Organization of Industry-A Comparative Analysis of Japanese Industrial Organization.- Information Rent and Technology Choice in a Regulated Firm.- Constitutional Contracting and Corporate Constitution.- Collusion and Budget Distortions in Hierarchical Organizations.- Long-Term Franchise Contracts: A Closer Look at the Hold-Up Problem.- Capital Structure, the Risk Incentive Problem, and Repeated Investment Opportunities.- Financial Contracting with Adverse Selection and Moral Hazard.- On the Rationality of Kidnaps, Blackguards, and Hostages.- Information Problems in the Market for Medical Services.- Data Envelopment Analysis: A Basis for Incentive Contracting.- Environmental Problems from a Property Rights Perspective.- Efficient Allocation of an Indivisible Good: A Mechanism Design Problem under Uncertainty.- Risk Sharing Markets and Export Production.- Slot Allocation in the United States. A Transaction Cost Economic Analysis.