Thursday, February 16, 2006

Professor Steven Cheung and Contract Theory

A reader of my earlier post asked: "it seems you have become a blind-follower of him (here the reader is referring to professor Steven N.S. Cheung). He claim[s] to have invented the contract theory. Apparently, this claim is not shared in the profession."

Is it true that professor Cheung, as this reader claims, is the only person in the world who believes that he is the pioneer of the field contract economics?

Dean Lueck at U of Arizona wrote a paper entitled," Yoram Barzel and the New institutional Economics." On page 3, footnote 6, he wrote: "Indeed Cheung (1969) can lay claim to first possession of the idea that share contracts are designed to tradeoff moral hazard against risk avoidance. Stiglitz (1974) is usually thought to be the first and is most often cited as such."

Cheung (1969)of course refers to his book "A Theory of Share Tenancy." Need I say more?

1 comment:

snowball said...

It seems you still do not understand. In any case, even there are 10 papers in the literature who said Cheung was the pioneer but hundreds of thousands of others who do not think so. does it qualify as that the profession shares the view that Cheung is the pioneer? Indeed, the paper you refereed to is on New Institutional Economics. Cheung of course has a place in this diminishing field (except in China, maybe). But in the mainstream contract theory or incentive theory.........need I say more?

Indeed, I admire Cheung's creativity and talent so much too. My major complaint to the previous post is as follows:

A: Wow wow wow, this book is problematic.

B: Why?

A: Because it did not cite the work of my teacher (or the one I admire).

B: -_-"........(thinking: how come someone having reasoning skills like this can manage to get a econ PhD.....I have come to be suspicious about the quality of some non-mainstream US-produced econ PhD...)