Economics provides the tools to analyse contracts and to understand when they work and when they don’t.
Companies enter into many contracts and agreements: with buyers, sellers, collaborators, partners, competitors, and with governments or regulators.
Contract design is complex. It is usually impossible to foresee and specify what the parties will do in every circumstance, some parties may have better information than others and all contracts impose incentives: explicit or implicit, intentional or unintentional.
For Frontier contract design and evaluation starts by analysing the fundamental economics of the markets and those involved. It then focuses on the economics of the transaction: information, incentives and capabilities. Finally, it assesses the impact on expected payoffs and the allocation of risk and reward.
By focusing on the fundamentals we help clients with gaining competitive advantage, commercial contracting disputes, transfer pricing and regulatory contract design.