This paper examines a two-period principal and agent model where the agent's ability level is not observable to the principal and revealed to the agent only after the contract is signed. The value of the agent's output to the principal is affected by the agent's collegiality, which is unknown to...

This paper links two literatures. The paper adds to results on disagreement in perfect information bargaining games. It is found that, under certain conditions, the possibility of third-party intervention induces delay. The paper is also the first attempt to model the arbitration process in a...

This note concerns the selection of objectives to be held when compensating sellers for buyer's breach. Our legal system employs the objective of the protection of expectation interest, which holds that the seller should be made as well off as he or she would have been had the contract not been...

Suppose a buyer enters into a contract with a seller and subsequently wishes not to perform. This paper examines a formal model of three standard remedies-lost profits, market damages, and specific performance-to assess how well each compensates the seller. By defin ition, specific performance...