The Prizes continue to be given. The Economics winners have an interesting bit of work behind them.
One of these, Mr. Williamson, has expanded upon a couple of ideas in his work: "The first is that a contractual agreement can never be complete; there are always contingencies that haven't been accounted for. The other is that people act opportunistically within the gray area of contracts to make sure they benefit the most, and that can lead to problems".
Oh, really, now? Somehow, common sense has taken leave of us, it seems. Ah, those sirens of abstraction, mathematics (flim-flam), computation, and pseudo-nerdism just seem to have gotten a very good grip on our senses. Tsk, Tsk.
What we could say is, just like with ethics, some rule needs to kick in when the area is gray. Well, as said before, that old 'golden' one was fine; note, 'golden' in this sense is entirely different than in the following usage: golden sacks.
Of course, we could also go into t-issues whose hold on the common sense seems to have wavered through various dynamics.
We'll say it again. The lesson applies to finance where we ought to run the thing with a non-profit focus, that is, anti-opportunism. By the way, I'll even volunteer.
Oh, by the way, what helps with the gray area in a company, besides ethics? Ah, culture. They ought to know that.