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Incomplete Contracting, Renegotiation, and Expectation-Based Loss Aversion

Herweg, Fabian; Karle, Heiko; Muller, Daniel - C.E.P.R. Discussion Papers - 2014

renegotiation. If the buyer expects renegotiation always to take place, the parties are always able to implement the materially … efficient good ex post. It can be optimal for the buyer, however, to expect that renegotiation does not take place. In this case …

Persistent link: https://www.econbiz.de/10011083642

Incomplete Contracts and Renegotiation

Hardman Moore, John; Hart, Oliver - C.E.P.R. Discussion Papers - 1985

When drawing up a contract, it is often impracticable to specify all the possible relevant contingencies, and so contracts are typically incomplete. This paper considers the extent to which these gaps might be filled by building into the contract a mechanism for revising the terms of trade. One...

Persistent link: https://www.econbiz.de/10005281283

Sovereign Debt and Structural Reforms

Müller, Andreas; Storesletten, Kjetil; Zilibotti, Fabrizio - C.E.P.R. Discussion Papers - 2015

default threat, creditors can make a take-it-or-leave-it debt haircut offer to the sovereign. The risk of renegotiation is … one-period debt and can renege on its obligations by suffering a stochastic default cost. When faced with a credible …

Persistent link: https://www.econbiz.de/10011276380

Moral Hazard and Capital Structure Dynamics

Dewatripont, Mathias; Legros, Patrick; Matthews, Steven A - C.E.P.R. Discussion Papers - 2002

effort. These contracts are optimal if the entrepreneur has the bargaining power in renegotiation. If the investor has the …

Persistent link: https://www.econbiz.de/10005498043

Renegotiation Before Contract Execution

Wambach, Achim - C.E.P.R. Discussion Papers - 1999

immediate renegotiation. This is discussed in an axiomatic approach. We show that if, given the revealed information, there … exists a contract which is preferred by everyone, the former contract could not have been renegotiation proof. For private …

Persistent link: https://www.econbiz.de/10005504482

Does Migration Empower Married Women?

Chen, Natalie; Conconi, Paola; Perroni, Carlo - C.E.P.R. Discussion Papers - 2006

suggests that they should experience comparatively larger gains. However, if renegotiation possibilities are limited by … Socio-Economic Panel indeed shows that, as long as renegotiation opportunities are limited, comparatively better wages for …

Persistent link: https://www.econbiz.de/10005497767

Communication, Renegotiation, and the Scope for Collusion

Cooper, David J.; Kühn, Kai-Uwe - C.E.P.R. Discussion Papers - 2009

likely when we allow for renegotiation, contrary to standard theories of renegotiation. What appears critical for the success … of collusion with renegotiation is that cheaters are often admonished in strong terms. Allowing renegotiation therefore …

Persistent link: https://www.econbiz.de/10008558586

Can Contracts Solve the Hold-Up Problem? Experimental Evidence

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2009

when renegotiation cannot be prevented. Ultimately, the question has to be answered empirically. As a first step in that … benefit the non-investing party. While according to standard theory, contracting would be useless if renegotiation cannot be …

Persistent link: https://www.econbiz.de/10005067500

Should Contractual Clauses that Forbid Renegotiation Always be Enforced?

Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2005

demonstrates that it may well be socially desirable not to enforce contractual terms that explicitly prevent renegotiation, even if … renegotiation can constrain the principal's abilities to introduce distortions in order to reduce the agent's rent, so that the …

Persistent link: https://www.econbiz.de/10005656463

Dynamic Adverse Selection and Debt

Chemla, Gilles; Faure-Grimaud, Antoine - C.E.P.R. Discussion Papers - 1998

In many long-term relationships, parties may be reluctant to reveal their private information in order to benefit from their informational advantage in the future. We point out that the strategic use of debt by an uninformed party induces another party to reveal private information. Our...

Persistent link: https://www.econbiz.de/10005661720