Cognition and Incomplete Contracts
Thinking about contingencies, designing covenants, and seeing through their implications is costly. Parties to a contract accordingly use heuristics and leave it incomplete. The paper develops a model of limited cognition and examines its consequences for contractual design. (JEL D23, D82, D86, L22)
(This abstract was borrowed from another version of this item.)
|Date of creation:||Feb 2008|
|Publication status:||Published in American Economic Review, vol. 99, n°1, mars 2009, p. 265-294.|
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- Ilya Segal, 1999. "Complexity and Renegotiation: A Foundation for Incomplete Contracts," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 57-82. Full references (including those not matched with items on IDEAS)
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