Several recent articles have shown that the efficient outcome for bilateral trade, even in the face of specific investments and incomplete contracting, can be supported with approximately-designed contracts. These studies have, for the most part, restricted attention to specific investments that...

This paper studies the effectiveness of alternative contract damages in inducing cooperative investments -- specific investments that generate a direct benefit to the investor's trading partner.

This paper presents a model of auctions with resale which is then applied to sales of timber harvesting contracts held by the U.S. Forest Service. After a contract is sold, there is often a considerable delay before harvesting must begin, and each firm's uncertainty regarding the value it places...

The paper analyzes repeated contract negotiations involving the same buyer and seller where the contracts are linked because the buyer has persistent (but not fully permanent) private information. (The main application is labor contracts, where the employer has private information about the...