This paper studies the implications of non-commitment for organizational design. An organizational form must trade-off between the coordination benefits associated with the centralization of information and its associated costs in terms of renegotiation. The analysis makes precise what these...

This paper examines how the possibility of renegotiation affects contractual outcomes in signaling games when an infinite number of rounds of renegotiations are allowed before contracts are executed. The main results of the paper are (1) contracts may still contain distortions, (2) the popular...

The author shows that, in credit relationships, the choice of a lender may become a determinant of the extent of competition in downstream industries. In the presence of imperfect output markets and asymmetric information in financial markets, members of an industry may achieve a partial...

This paper addresses the question of whether R&D should be carried out by an independent research unit or be produced in-house by the firm marketing the innovation. We define two organizational structures. In an integrated structure, the firm that markets the innovation also carries out and...

We examine why different renegotiation processes can lead to opposite results regarding the commitment value of third-party contracts in the presence of asymmetric information. Our main result is that a contract loses all strategic value if renegotiation is allowed during the production stage...

This paper examines how different rules for presentation of evidence affect verdicts in regulatory hearings and the welfare and efficiency properties these procedures exhibit. The hearing is modeled as a game of imperfect information in which the respondent is privately informed about validity...

This paper studies the implications of non-commitment for organizational design. An organizational form must trade-off between the coordination benefits associated with the centralization of information and its associated costs in terms of renegotiation. This analysis makes precise what these...