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Agreeing now to agree later: contracts that rule out but do not rule in

Hart, Oliver; Moore, John - London School of Economics (LSE) - 2004

We view a contract as a list of outcomes. Ex ante, the parties commit not to consider outcomes not on the list, i ….e., these are "ruled out". Ex post, they freely bargain over outcomes on the list, i.e., the contract specifies no mechanism to … structure their choice; in this sense outcomes on the list are not "ruled out". A "loose" contract (long list) maximizes …

Persistent link: https://www.econbiz.de/10010746644

Control rights over intellectual property: corporate venturing and bankruptcy regimes

Bhattacharya, Sudipto; Guriev, Sergei - London School of Economics (LSE) - 2008

We develop a theory of control rights in the context of licencing interim innovative knowledge for further development, which is consistent with the inalienability of initial innovator's intellectual property rights. Control rights of a downstream development unit, a buyer of the interin...

Persistent link: https://www.econbiz.de/10010745892

Enforcement-proof contracts with moral hazard in precaution: ensuring ‘permanence’ in carbon sequestration

MacKenzie, Ian A.; Ohndorf, Markus; Palmer, Charles - London School of Economics (LSE) - 2010

Opportunistic behaviour due to incomplete contract enforcement is a risk in many economic transactions such as forest … carbon sequestration contracts. In this paper, an enforcement-proof incentive contract is developed in which a buyer demands … potential for opportunistic contract breach. The optimal design of forest carbon contracts to ensure permanence is derived …

Persistent link: https://www.econbiz.de/10010745900

Trapped factors and China’s impact on global growth

Bloom, Nicholas; Romer, Paul; Terry, Stephen; Van … - London School of Economics (LSE) - 2014

In a general equilibrium product-cycle model, lower trade barriers in-crease Southern purchasing power, which lifts long-run growth by increasing the profit from innovation. In the short run, factors of production must be reallocated inside firms, which lowers the opportunity cost of innovation,...

Persistent link: https://www.econbiz.de/10011126023

Student satisfaction, league tables and University applications

Gibbons, Stephen; Neumayer, Eric; Perkins, Richard - London School of Economics (LSE) - 2013

We investigate the impact of information about student satisfaction on university choice, using data from the UK’s National Student Survey (NSS) and on applications to undergraduate degree courses. We show that the NSS has a small, statistically significant effect on applications at the...

Persistent link: https://www.econbiz.de/10011126173

Rational trader risk

Kondor, Peter - London School of Economics (LSE) - 2004

Allowing for a richer information structure than usual, we show that rational traders’ calculation with short-term price fluctuations may heavily influence their behaviour even if the interim price is not influenced by non-rational agents i.e. there is no noise trader risk. Instead, traders...

Persistent link: https://www.econbiz.de/10010884635

Hayek on the wisdom of prices: a reassessment

Bronk, Richard - London School of Economics (LSE) - 2013

This paper re-examines Hayek’s insights into the problem of knowledge in markets, and argues that his analysis remains pertinent but has serious flaws. His central thesis—that the market price system is essential for communicating information and coordinating transactions wherever knowledge...

Persistent link: https://www.econbiz.de/10011071336

Uncertainty and the dynamics of R&D

Bloom, Nick - London School of Economics (LSE) - 2007

Uncertainty varies strongly over time, rising by 50% to 100% in recessions and by up to 200% after major economic and political shocks. This paper shows that higher uncertainty reduces the responsiveness of R&D to changes in business conditions - a “caution-effect” - making it more...

Persistent link: https://www.econbiz.de/10011071505

Risk and wealth in a model of self-fulfilling currency attacks

Guimaraes, Bernardo; Morris, Stephen - London School of Economics (LSE) - 2006

Market participants' risk attitudes, wealth and portfolio composition in°uence their positions in a pegged foreign currency and, therefore, may have important e®ects on the sustainability of currency pegs. We analyze such e®ects in a global game model of currency crises with continuous action...

Persistent link: https://www.econbiz.de/10011071518

Unique equilibrium in a dynamic model of crises with frictions

Guimaraes, Bernardo - London School of Economics (LSE) - 2005

This paper studies a dynamic model of crises with timing frictions that combines the main aspects of Morris and Shin (1998) and Frankel and Pauzner (2000). The usual arguments for existence and uniqueness of equilibrium cannot be applied. It is shown that the model has a unique equilibrium...

Persistent link: https://www.econbiz.de/10010928606