More is Less - Couverture souple

Halonen-Akatwijuka, Maija

Couverture souple

ISBN 10 : 1009396072 ISBN 13 : 9781009396073

Editeur : Cambridge University Press, 2024

Synopsis

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 is strictly superior to a contingent contract. If parties have different views about the division of surplus, an incomplete contract can be superior if including a contingency would lead to divergent reference points.

Détails de l'édition

• Éditeur: Cambridge University Press
• Date d'édition: 2024
• Langue: anglais
• ISBN 10: 1009396072
• ISBN 13: 9781009396073
• Reliure: Broché
• Nombre de pages: 34
• Coordonnées du fabricant: non disponible
• Personne responsable: Avery; https://www.avery.fr/; ; chemin des peupliers 27; Dardilly; France