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Indescribability and asymmetric information at the contracting stage

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  • Kunimoto, Takashi

Abstract

Maskin and Tirole [Maskin, E., Tirole, J., 1999. Unforeseen contingencies and incomplete contracts. Review of Economic Studies, 66, 83-114] show that indescribability does not matter for contractual incompleteness when there is symmetric information both at the contracting stage and at the trading stage. Following their setup, I show that with asymmetric information at both stages, indescribability can matter.

Suggested Citation

  • Kunimoto, Takashi, 2008. "Indescribability and asymmetric information at the contracting stage," Economics Letters, Elsevier, vol. 99(2), pages 367-370, May.
    • Handle: RePEc:eee:ecolet:v:99:y:2008:i:2:p:367-370
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    References listed on IDEAS

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    1. Oliver Hart & John Moore, 1999. "Foundations of Incomplete Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 115-138.
    2. Eric Maskin & Jean Tirole, 1999. "Unforeseen Contingencies and Incomplete Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 83-114.
    3. Maskin, Eric, 2002. "On indescribable contingencies and incomplete contracts," European Economic Review, Elsevier, vol. 46(4-5), pages 725-733, May.
    4. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
    5. Takashi Kunimoto, 2010. "Indescribability and its irrelevance for contractual incompleteness," Review of Economic Design, Springer;Society for Economic Design, vol. 14(3), pages 271-289, September.
    6. Ilya Segal, 1999. "Complexity and Renegotiation: A Foundation for Incomplete Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 57-82.
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