Contract Theory
Categories: Financial Theory, Econ
In sports, you've got the players, and then you've got the analysts. This is especially true in baseball. You've got the guys who can throw a ball 90 mph and guys who can hit the ball 450 feet...and then you've got the guys who invented WAR and OPS+, but get winded walking to the fridge.
That's kind of like contract theory. Contract theory is a branch of economics that studies how contracts are made and get used.
So you've got the business people in the real world making deals. Then you've got the academic study of how those deals work, and what goes into the decision-making process that shapes those agreements.
It's quite literally the theory of contracts.