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Investment timing and efficiency in incomplete contracts

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  • James Dearden
  • Dorothy Klotz

Abstract

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Suggested Citation

  • James Dearden & Dorothy Klotz, 1996. "Investment timing and efficiency in incomplete contracts," Review of Economic Design, Springer;Society for Economic Design, vol. 2(1), pages 369-378, December.
    • Handle: RePEc:spr:reecde:v:2:y:1996:i:1:p:369-378
    DOI: 10.1007/BF02499141
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    References listed on IDEAS

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    1. Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1994. "Renegotiation Design with Unverifiable Information," Econometrica, Econometric Society, vol. 62(2), pages 257-282, March.
    2. Nöldeke, Georg & Schmidt, Klaus M., 1995. "Option contracts and renegotiation," Munich Reprints in Economics 19329, University of Munich, Department of Economics.
    3. Hermalin, Benjamin E & Katz, Michael L, 1993. "Judicial Modification of Contracts between Sophisticated Parties: A More Complete View of Incomplete Contracts and Their Breach," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 9(2), pages 230-255, October.
    4. MacLeod, W Bentley & Malcomson, James M, 1993. "Investments, Holdup, and the Form of Market Contracts," American Economic Review, American Economic Association, vol. 83(4), pages 811-837, September.
    5. Edlin, Aaron S & Reichelstein, Stefan, 1996. "Holdups, Standard Breach Remedies, and Optimal Investment," American Economic Review, American Economic Association, vol. 86(3), pages 478-501, June.
    6. Hart, Oliver D & Moore, John, 1988. "Incomplete Contracts and Renegotiation," Econometrica, Econometric Society, vol. 56(4), pages 755-785, July.
    7. William P. Rogerson, 1992. "Contractual Solutions to the Hold-Up Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 777-793.
    8. Masten, Scott E & Crocker, Keith J, 1985. "Efficient Adaptation in Long-term Contracts: Take-or-Pay Provisions for Natural Gas," American Economic Review, American Economic Association, vol. 75(5), pages 1083-1093, December.
    9. Georg Noldeke & Klaus M. Schmidt, 1995. "Option Contracts and Renegotiation: A Solution to the Hold-Up Problem," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 163-179, Summer.
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    Citations

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    Cited by:

    1. Georg Noeldeke & Klaus Schmidt, 1998. "Sequential Investments and Options to Own," RAND Journal of Economics, The RAND Corporation, vol. 29(4), pages 633-653, Winter.
    2. Evelina Mengova, 2014. "Quality of Institutions and Outsourcing," International Economic Journal, Taylor & Francis Journals, vol. 28(4), pages 639-659, December.
    3. Tai-Yeong Chung & Alan Chan, 2004. "Contract Damages and Investment Dynamics," Econometric Society 2004 Far Eastern Meetings 683, Econometric Society.

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    More about this item

    Keywords

    L22; K12; C7; D8; Investment; Incomplete contracts; Hold-up problem; Renegotiation; Opportunism;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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