We develop a model in which the parties to a joint production project have a choice of specifying contractual performance in terms of actions or deliverables. Penalties for noncompliance are not specified; rather, they are left to the courts under the legal doctrine of compensatory damages. We...

A large theoretical literature on value capture following Brandenburger and Stuart (1996)uses cooperative games under complete information to study how and why firms earn supernormalprofits. However, firms often have different information, beliefs, or creative foresight.We extend value capture...

This paper provides the first review of developments in the application of cooperative game theory to issues of interest to strategic management; what we term “value capture theory.” Value capture theory provides a broad approach to formal strategy theory aimed at under- standing persistent...

Thaler and Sunstein (2008) advance the concept of ‘nudge’ policies—non-regulatory and non-fiscal mechanisms designed to enlist people's cognitive biases or motivational deficits so as to guide their behaviour in a desired direction. A core assumption of this approach is that policymakers...

A large theoretical literature on value capture following Brandenburger and Stuart Jr. (1996) uses cooperative games under complete information to study how and why firms earn supernormal profits. However, firms often have different information, beliefs, or creative foresight. We extend value...