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Glossary   >   O   >   "Optimal contract" Definition            Optimal contract The contract that balances the three types of agency costs (contracting, monitoring, and misbehavior) against one another to minimize the total cost. Glossary    Dictionary Search (powered by Google) WWW ITLOCUS.COM GLOSSARY.ITLOCUS.COM Translate a web page (powered by Google)      to German Spanish French Italian Portuguese Japanese Korean Chinese

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Optimal contract - The contract that balances the three types of agency costs (contracting, monitoring, and misbehavior) against one another to minimize the total cost.