A manufacturer writes supply contracts with N buyers. Then, the buyers invest in innovation, and the manufacturer builds capacity. Finally, demand is realized, and the firms renegotiate the supply contracts to achieve an efficient allocation of capacity among the buyers. The court remedy for...

After entering into supply contracts, firms often later renegotiate the terms of those contracts. For example, firms that obtain market demand information after signing supply contracts may benefit by renegotiating the contracts to allow buyers facing poor market conditions to purchase less than...

Consider a firm that is developing a highly innovative product. Producing the product requires that an upstream supplier invest in production capacity well in advance. Because the product is ill-defined at the time when the supplier initiates his capacity investment, the firms are unable to...