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Contractual Enforcement Institutions and the Structure of Information

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  • Avery W. Katz
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    Abstract

    Many economic writers on contract theory have assumed that legal institutions are simply unable to do the job of enforcement, and have thus attempted to devise arrangements that motivate the parties to keep their commitments even though a government tribunal would be unable to tell whether they had performed. But non-legal enforcement mechanisms operate both as substitutes and complements for legal mechanisms (and as substitutes and complements for each other). This essay sketches how parties should choose among available enforcement mechanisms, based on the costs of information and other transaction costs.

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    Bibliographic Info

    Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

    Volume (Year): 164 (2008)
    Issue (Month): 1 (March)
    Pages: 134-154

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    Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200803)164:1_134:ceiats_2.0.tx_2-

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    Cited by:
    1. Sylvain Rossiaud, 2014. "Opening the upstream oil industry to private companies," Working Papers halshs-00960681, HAL.

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