This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Mitigating Contractual Hazards: Unilateral Options and Contract Length

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Keith J. Crocker
Scott E. Masten

Additional information is available for the following registered author(s):

Abstract

In this article we consider the ways in which the desire for efficient, low-cost adaptation to change influences the tradeoff between the design and duration of long-term contractual relationships. We examine the distortions in contract terms occasioned by nonprice competition for natural gas in the presence of wellhead price regulation. Deviations from optimal contract incentives significantly raise the cost of being bound to long-term agreements and shorten the duration of contracts. The approach we adopt suggests a method for empirically assessing the efficiency of alternative contracting practices and legal standards.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://links.jstor.org/sici?sici=0741-6261%28198823%2919%3A3%3C327%3AMCHUOA%3E2.0.CO%3B2-B&origin=repec
File Format: application/pdf
File Function: full text
Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 19 (1988)
Issue (Month): 3 (Autumn)
Pages: 327-343
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:rje:randje:v:19:y:1988:i:autumn:p:327-343

Contact details of provider:
Web page: http://www.rje.org

Order Information:
Web: http://gemini.econ.umd.edu/cgi-bin/rje_online.cgi

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. John McLaren, 2000. ""Globalization" and Vertical Structure," American Economic Review, American Economic Association, vol. 90(5), pages 1239-1254, December. [Downloadable!] (restricted)
  2. Neumann, A. & von Hirschhausen, C., 2006. "Long-Term Contracts and Asset Specificity Revisited -An Empirical Analysis of Producer-Importer Relations in the Natural Gas Industry," Cambridge Working Papers in Economics 0630, Faculty of Economics, University of Cambridge. [Downloadable!]
    Other versions:
  3. Bardos, Krisztina & Ferto, Imre, 2006. "The Contract Choice of Retailers in Hungarian Beef Sector," 99th Seminar, February 8-10, 2006, Bonn, Germany 7746, European Association of Agricultural Economists. [Downloadable!]
  4. Sergei Guriev & Dmitriy Kvasov, 2005. "Contracting on Time," American Economic Review, American Economic Association, vol. 95(5), pages 1369-1385, December. [Downloadable!]
    Other versions:
  5. Maria Kozhevnikova & Ian Lange, 2009. "Determinants of Contract Duration: Further Evidence from Coal-Fired Power Plants," Review of Industrial Organization, Springer, vol. 34(3), pages 217-229, May. [Downloadable!] (restricted)
  6. Jonathan Yoder & Ishrat Hossain & Francis Epplin & Damona Doye, 2005. "Contract Duration and the Division of Labor in Agricultural Land Leases," Working Papers 2005-5, School of Economic Sciences, Washington State University. [Downloadable!]
    Other versions:
  7. Maria Goddard & Russell Mannion & Brian Ferguson, 1997. "Contracting in the UK NHS: purpose, process and policy," Working Papers 156chedp, Centre for Health Economics, University of York. [Downloadable!]
  8. Chiappori, Pierre Andre & Salanie, Bernard, 2002. "Testing Contract Theory: A Survey of Some Recent Work," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  9. MacDonald, James & Korb, Penni, 2006. "Duration in Production Contracts," 2006 Annual meeting, July 23-26, Long Beach, CA 21112, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  10. Francine Lafontaine & Kathryn L. Shaw, 1996. "The Dynamics of Franchise Contracting: Evidence from Panel Data," NBER Working Papers 5585, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Marco Furlotti, 2007. "There is more to contracts than incompleteness: a review and assessment of empirical research on inter-firm contract design," Journal of Management and Governance, Springer, vol. 11(1), pages 61-99, March. [Downloadable!] (restricted)
  12. Neuhoff, K. & von Hirschhausen, C., 2005. "Long-term vs. Short-term Contracts; A European perspective on natural gas," Cambridge Working Papers in Economics 0539, Faculty of Economics, University of Cambridge. [Downloadable!]
  13. Joseph C. Mullin & Wallace P. Mullin, 1996. "United States Steel's Acquisition of the Great Northern Ore Properties: Vertical Foreclosure or Efficient Contractual Governance?," NBER Working Papers 5662, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Anne Yvrande, 2000. "The New British Railways Structure A Transaction Cost Economics Analysis," DRUID Working Papers 00-5, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies. [Downloadable!]
  15. QUELIN, Bertrand & BARTHELEMY, Jerome, 2002. "Competence, specificity and outsourcing: impact on the complexity of the contract," Les Cahiers de Recherche 759, HEC Paris. [Downloadable!]
  16. Dan Elfenbein & Josh Lerner, 2001. "Links and Hyperlinks: An Empirical Analysis of Internet Portal Alliances, 1995-1999," NBER Working Papers 8251, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Matthew Ellman, 2006. "The Optimal Length of Contracts with Application to Outsourcing," Economics Working Papers 965, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
Statistics
Access and download statistics

Did you know? No RePEc service, like IDEAS, charges for the use or the display of bibliographic data.

This page was last updated on 2009-11-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.