More is Less by Maija Halonen-Akatwijuka
Why are contracts incomplete? Transaction costs and bounded rationality cannot be a total explanation since states of the world are often describable, foreseeable, and yet are not mentioned in a contract. Asymmetric information theories also have limitations. We offer an explanation based on 'contracts as reference points'. Including a contingency of the form, 'The buyer will require a good in event E', has a benefit and a cost. The benefit is that if E occurs there is less to argue about; the cost is that the additional reference point provided by the outcome in E can hinder (re)negotiation in states outside E. We show that if parties agree about a reasonable division of surplus, an incomplete contract is strictly superior to a contingent contract. If parties have different views about the division of surplus, an incomplete contract can be superior if including a contingency would lead to divergent reference points.| SKU | Nicht verfügbar |
| ISBN 13 | 9781009396073 |
| ISBN 10 | 1009396072 |
| Titel | More is Less |
| Autor | Maija Halonen-Akatwijuka |
| Serie | Elements In Law Economics And Politics |
| Buchzustand | Nicht verfügbar |
| Bindungsart | Paperback |
| Verlag | Cambridge University Press |
| Erscheinungsjahr | 2024-05-23 |
| Seitenanzahl | 34 |
| Hinweis auf dem Einband | Die Abbildung des Buches dient nur Illustrationszwecken, die tatsächliche Bindung, das Cover und die Auflage können sich davon unterscheiden. |
| Hinweis | Nicht verfügbar |