The paper is an extension of the contributions provided by Aghion and Bolton (1987), Chung (1994, 1996), and Spier and Whinston (1995)--among others--to the analysis of the trade-off between the enforcement of incomplete contracts characterised by specific investments and the market foreclosure...

This paper studies a two stage incomplete contract between a buyer and a seller, with specific investments and endogenous outside options. Given that a party's outside option identifies counterpart's competitors, with such endogenous outside options, some of the main conclusions of the standard...

In this paper we analyze the problem of the enforcement of incomplete contracts with endogenous outside options. Some of the equilibria we outline may reverse one of the main results presented in the standard literature. We then revisit the literature on the highly debated Fisher Body/General...