Brandts, Jordi; Charness, Gary; Ellman, Matthew - CESifo - 2012
communication, a normal feature in contracting, can remove the potential cost of flexibility (disagreements caused by conflicting … shock and a discretionary buyer transfer. In the absence of communication, we find that rigid contracts are more frequent … and lead to higher earnings for both buyer and seller. By contrast, in the presence of communication, flexible contracts …