Contract renegotiation under asymmetric information PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Contract renegotiation under asymmetric information PDF full book. Access full book title Contract renegotiation under asymmetric information by Sönje Reiche. Download full books in PDF and EPUB format.
Author: Sönje Reiche
Publisher:
ISBN:
Category : Academic theses
Languages : en
Pages : 0
Get Book Here
Book Description
Author: Sönje Reiche
Publisher:
ISBN:
Category : Academic theses
Languages : en
Pages : 0
Get Book Here
Book Description
Author: Sonje Kerrin Reiche
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 312
Get Book Here
Book Description
Author: Oliver D. Hart
Publisher:
ISBN:
Category : Contracts
Languages : en
Pages : 64
Get Book Here
Book Description
In the last few years a new area has emerged in economic theory, which goes under the heading of However, almost since its inception, the theory has been under attack for its lack of rigorous foundations. In this paper, we evaluate some of the criticisms that have been made of the theory, in particular, those in Maskin and Tirole (1998a). In doing so, we develop a model that provides a rigorous foundation for the idea that contracts are incomplete.
Author: Mathias Dewatripont
Publisher:
ISBN:
Category : Contracts
Languages : en
Pages : 12
Get Book Here
Book Description
Author: Sugata Bag
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
Get Book Here
Book Description
In the early models of incomplete contract neither party used to invest in the subject matter of the contract; those models primarily kept their focus on analyzing the effect of legal rules on parties' incentives to trade or to breach. The modern models stretched beyond that to include value enhancing investments into its purview and establish an important result: (legal) penalties often are necessary to induce efficient investment; otherwise 'hold-up' (underinvestment) a general phenomenon when contracts are incomplete. But most of these models' findings are limited to typically symmetric or complete information scenario. In reality, the contracting parties usually possess some non-contractible private information either on their reliance or on their out side trading options or both (since either it is costly to describe or non-verifiable) and there may be ex-ante uncertainty associated with their valuations. So far asymmetric information has played a very limited role in the analysis of hold up problem. Therefore, in light of new and asymmetric information that the parties expected to realize subsequent to a binding contract, a systematic analysis has been attempted to see - first, how the legal remedies can solve hold up problem when parties also bear ex ante private information; secondly, how the courts of law can play a greater role than that has been realized. Focus remains on the ex-ante design of the contract, which would serve as an implicit substitute to complete contracts. Under asymmetric participation to contract, one of our main results shows that although the expectation damage remedy maximizes the social surplus for the parties across different dimensions of asymmetry (uncertainty) but induces excessive reliance. It is also found that party designed liquidated damage remedy is superior to all other court imposed remedies when one-sided asymmetry is concern. Finally we show that when dual asymmetry (uncertainty) is present in a contracting situation a high damage measure (even higher that expectation damage) induces efficient reliance by the parties. These results bear serious implications for various contract doctrines and debates.
Author: Maija Halonen-Akatwijuka
Publisher:
ISBN:
Category : Economics
Languages : en
Pages :
Get Book Here
Book Description
Why are contracts incomplete? Transaction costs and bounded rationality cannot be a total explanation since states of the world are often describable, foreseeable, and yet are not mentioned in a contract. Asymmetric information theories also have limitations. We offer an explanation based on "contracts as reference points". Including a contingency of the form, "The buyer will require a good in event E", has a benefit and a cost. The benefit is that if E occurs there is less to argue about; the cost is that the additional reference point provided by the outcome in E can hinder (re)negotiation in states outside E. We show that if parties agree about a reasonable division of surplus, an incomplete contract can be strictly superior to a contingent contract.
Author: Patrick W. Schmitz
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
In this article it is demonstrated that voluntary bargaining over a collective decision under asymmetric information may well lead to ex post efficiency if the default decision is non-trivial. It is argued that the default decision may be interpreted as a simple contract that the parties have written ex ante. This result is used in order to show that simple unconditional contracts which are renegotiated may allow the hold-up problem to be solved, even if the parties' valuations are private information.
Author: Patrick Schmitz
Publisher:
ISBN:
Category : Business intelligence
Languages : en
Pages : 13
Get Book Here
Book Description
Author: Oliver Hart
Publisher: Clarendon Press
ISBN: 0191521728
Category : Business & Economics
Languages : en
Pages : 244
Get Book Here
Book Description
This book provides a framework for thinking about economic instiutions such as firms. The basic idea is that institutions arise in situations where people write incomplete contracts and where the allocation of power or control is therefore important. Power and control are not standard concepts in economic theory. The book begins by pointing out that traditional approaches cannot explain on the one hand why all transactions do not take place in one huge firm and on the other hand why firms matter at all. An incomplete contracting or property rights approach is then developed. It is argued that this approach can throw light on the boundaries of firms and on the meaning of asset ownership. In the remainder of the book, incomplete contacting ideas are applied to understand firms' financial decisions, in particular, the nature of debt and equity (why equity has votes and creditors have foreclosure rights); the capital structure decisions of public companies; optimal bankruptcy procedure; and the allocation of voting rights across a company's shares. The book is written in a fairly non-technical style and includes many examples. It is aimed at advanced undergraduate and graduate students, academic and business economists, and lawyers as well as those with an interest in corporate finance, privatization and regulation, and transitional issues in Eastern Europe, the former Soviet Union, and China. Little background knowledge is required, since the concepts are developed as the book progresses and the existing literature is fully reviewed.
