IDEAS home Printed from
   My bibliography  Save this paper

Renegotiation Before Contract Execution


  • Achim Wambach

    (University of Munich)


By offering or choosing a contract the informed agent might reveal information to the principal which could be used for immediate renegotiation. This is discussed in an axiomatic approach. We show that if, given the revealed information, there exists a contract which is preferred by everyone, the former contract could not have been renegotiation proof. For private values and common values of the 'Spence' type, a generalised Coase Conjecture holds: The principal cannot raise her profit by offering inefficient contracts to the agent. Only for common values of the 'Rothschild-Stiglitz' type, inefficient, but pooling, contracts are possible.

Suggested Citation

  • Achim Wambach, 2000. "Renegotiation Before Contract Execution," Econometric Society World Congress 2000 Contributed Papers 0775, Econometric Society.
  • Handle: RePEc:ecm:wc2000:0775

    Download full text from publisher

    File URL:
    File Function: main text
    Download Restriction: no

    File URL:
    File Function: main text
    Download Restriction: no

    Other versions of this item:

    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:0775. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.