We study contracting and costly renegotiation in settings of complete but unverifiable information, using the mechanism-design approach. We show how renegotiation activity is best modelled in the fundamentals of the mechanism-design framework, so that noncontractibility of renegotiation amounts...

This paper develops a theoretical framework for studying contract and enforcement in settings of complete, but unverifiable, information. The main point of the paper is that the consideration of renegotiation necessitates formal examination of other technological constraints, especially those...

This paper analyzes the role of third party intermediaries in contract enforcement. In our model, intermediaries record information about past actions and resolve disputes when requested to do so by the contracting agents. When the verifiability of information is limited, successful enforcement...