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Relational contracts as a foundation for contractual incompleteness

Author

Listed:
  • Claudine Desrieux

    (ERMES and Laboratoire d''Economie du droit, University of Paris II Panthéon-Assas)

  • Jean Beuve

    (IAE - University of Paris 1 and University of Paris XI)

Abstract

Contractual incompleteness is generally defined by a trade-off between costs and benefits. We examine this trade-off in a dynamic setting and show how the ability of the parties to sustain a relational contract leads to more incomplete contracts.

Suggested Citation

  • Claudine Desrieux & Jean Beuve, 2011. "Relational contracts as a foundation for contractual incompleteness," Economics Bulletin, AccessEcon, vol. 31(3), pages 2030-2040.
    • Handle: RePEc:ebl:ecbull:eb-11-00193
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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I3-P183.pdf
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    References listed on IDEAS

    as
    1. Jean Tirole, 2009. "Cognition and Incomplete Contracts," American Economic Review, American Economic Association, vol. 99(1), pages 265-294, March.
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    6. Bernheim, B Douglas & Whinston, Michael D, 1998. "Incomplete Contracts and Strategic Ambiguity," American Economic Review, American Economic Association, vol. 88(4), pages 902-932, September.
    7. Pierpaolo Battigalli & Giovanni Maggi, 2008. "Costly contracting in a long‐term relationship," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 352-377, June.
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    Cited by:

    1. Jean Beuve & Claudine Desrieux, 2016. "Repeated interactions and endogenous contractual incompleteness," Theory and Decision, Springer, vol. 80(1), pages 125-158, January.

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    More about this item

    Keywords

    Contractual incompleteness; Relational Contract; Reputation; Repeated Games;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • D2 - Microeconomics - - Production and Organizations

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