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Limited Contract Enforcement and Strategic Renegotiation Author info | Abstract | Publisher info | Download info | Related research | Statistics Huberman, Gur
Kahn, Charles M
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This paper presents a strategic theory of contract renegotiation. In this theory, suboptimal contracts are put in place initially to protect one party against undesirable a ctions by another party and are renegotiated once the danger is past. The authors develop a model to establish the cases in which simple contracts cannot achieve desirable outcomes, so that only a complicated contract or renegotiation will serve. Unlike most previous accounts of contract renegotiation, this theory does not rely on exogenous uncertainty to motivate renegotiation. Copyright 1988 by American Economic Association.
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Article provided by American Economic Association in its journal American Economic Review .
Volume (Year): 78 (1988)
Issue (Month): 3 (June)
Pages: 471-84
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Handle: RePEc:aea:aecrev:v:78:y:1988:i:3:p:471-84Contact details of provider: Email: Web page: http://www.aeaweb.org/aer/ More information through EDIRC
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