Search Results - subject:"Incomplete contracts"

Breach Remedies Including Hybrid Investments

Göller, Daniel; Stremitzer, Alexander - Volkswirtschaftliche Fakultät, … - 2009

We show that parties in bilateral trade can rely on the default common law breach remedy of â€˜expectation damagesâ€™ to induce simultaneously ?rst-best relationship-speci?c investments of both the sel?sh and the cooperative kind. This can be achieved by writing a contract that speci?es...

Persistent link: https://www.econbiz.de/10008633334

Firm Heterogeneity, Contract Enforcement, and the Industry Dynamics of Offshoring

Naghavi, Alireza; Ottaviano, Gianmarco I.P. - KITeS, Centre for Knowledge, Internationalization and … - 2009

incomplete contracts. In so doing, we model offshoring as the geographical fragmentation of a firm’s production chain between a … incomplete contracts also increases consumption depends on firm heterogeneity. On the normative side, we show that, whereas with … complete contract efficiency is restored through a subsidy to R&D only, with incomplete contracts a production subsidy to …

Persistent link: https://www.econbiz.de/10008683426

Do we need handshakes to cooperate in buyer-supplier relationships?

Sousa, José De; Fairise, Xavier - Centre d'Études des Politiques Économiques (EPEE), … - 2009

Based on differences in production costs, McLaren (1999) [“Supplier relations and the market context: a theory of handshakes”, Journal of International Economics 48, 121-138] demonstrates that informal ‘handshake’ arrangements foster cooperation in buyer-supplier relationships, compared...

Persistent link: https://www.econbiz.de/10010635706

Firm Heterogeneity, Contract Enforcement, and the Industry Dynamics of Offshoring

Naghavi, Alireza; Ottaviano, Gianmarco I. P. - Dipartimento di Economia, Management e Metodi … - 2009

heterogeneity and incomplete contracts. In so doing, we model offshoring as the geographical fragmentation of a firm’s production …. Whether offshoring with incomplete contracts also increases consumption depends on firm heterogeneity. As for welfare, whereas … with complete contracts an R&D subsidy is enough to solve the inefficiency due to R&D spillovers, with incomplete contracts …

Persistent link: https://www.econbiz.de/10008472064

Signaling an Outside Option

Ohlendorf, Susanne; Schmitz, Patrick - Volkswirtschaftliche Fakultät, … - 2009

We consider the case of an upstream seller who works to improve an asset that has been specialized to a downstream buyer's needs. The buyer then makes a take it or leave it offer to the seller about how the future surplus should be split. We assume that the seller from the outset has private...

Persistent link: https://www.econbiz.de/10008559289

A Matter of Interpretation: Bargaining over Ambiguous Contracts

Grant, Simon; Kline, Jeff; Quiggin, John - Risk and Sustainable Management Group (RSMG), School of … - 2009

We present a formal treatment of contracting in the face of ambiguity. The central idea is that boundedly rational individuals will not always interpret the same situation in the same way. More specifically, even with well defined contracts, the precise actions to be taken by each party to the...

Persistent link: https://www.econbiz.de/10008456771

Social preferences and competition

Schmidt, Klaus M. - 2009

hold when uncertainty is important (financial markets) or when incomplete contracts are traded (labor markets). Social …

Persistent link: https://www.econbiz.de/10003935667

On the legitimacy of coercion for the financing of public goods

Bierbrauer, Felix - 2009

The literature on public goods has shown that efficient outcomes are impossible if participation constraints have to be respected. This paper addresses the question whether they should be imposed. It asks under what conditions efficiency considerations justify that individuals are forced to pay...

Persistent link: https://www.econbiz.de/10003908910

Signaling an outside option

Ohlendorf, Susanne; Schmitz, Patrick W. - 2009

Persistent link: https://www.econbiz.de/10003909276

Breach remedies inducing hybrid investments

Göller, Daniel; Stremitzer, Alexander - 2009

We show that parties in bilateral trade can rely on the default common law breach remedy of 'expectation damages' to induce simultaneously first-best relationship-specific investments of both the selfish and the cooperative kind. This can be achieved by writing a contract that specifies a...

Persistent link: https://www.econbiz.de/10003909281