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Commitment with renegotiable debt contracts and verifiable cash flow

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  • Usman, Murat

Abstract

We study a Buyer-Seller relationship with one-sided relationship-specific investment. Debt commits the Seller not to trade at a low price even though it is renegotiable, and the cash flow is verifiable.

Suggested Citation

  • Usman, Murat, 2008. "Commitment with renegotiable debt contracts and verifiable cash flow," Economics Letters, Elsevier, vol. 99(2), pages 249-251, May.
    • Handle: RePEc:eee:ecolet:v:99:y:2008:i:2:p:249-251
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    References listed on IDEAS

    as
    1. Murat Usman, 2004. "Optimal Debt Contracts with Renegotiation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(4), pages 755-776, December.
    2. Yossef Spiegel, 1996. "The Role of Debt in Procurement Contracts," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(3), pages 379-407, September.
    3. Chemla, G. & Faure-Grimaud, A., 1996. "Dynamic Adverse Selection and Debt," Papers 96.443, Toulouse - GREMAQ.
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