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Stochastic Contracts and Subjective Evaluations
Lang, Matthias - 2021
Subjective evaluations are widely used, but call for different contracts from traditional moral-hazard settings. Previous literature shows that contracts require payments to third parties, which real-world contracts rarely use. I show that the implicit assumption of deterministic contracts makes...
Persistent link: https://www.econbiz.de/10013311715
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Trust and Contracts : Empirical Evidence
D'Acunto, Francesco; Xie, Jin; Yao, Jiaquan - 2021
Trust between parties should drive the negotiation and design of contract: if parties did not trust each others … over time, we find that lower trust increases contract completeness. Not only contract complexity but also the verifiable …
Persistent link: https://www.econbiz.de/10013314897
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Learning from Law Enforcement
Dusek, Libor - 2020
This paper studies how punishment for past offenses affects future compliance behavior and isolates deterrence effects mediated by learning. Using administrative data from speed cameras that capture the full driving histories of more than a million cars over several years, we evaluate responses...
Persistent link: https://www.econbiz.de/10012843418
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Spite in Litigation
Mill, Wladislaw; Stäbler, Jonathan - 2023
This paper studies how litigation and settlement behavior is affected by agents motivated by spiteful preferences under the American and the English fee-shifting rule. We conduct an experiment and find that litigation expenditures and settlement requests are higher for more spiteful...
Persistent link: https://www.econbiz.de/10014260383
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Social welfare versus inequality concerns in an incomplete contract experiment
Faravelli, Marco; Kirchkamp, Oliver; Rainer, Helmut - 2010
We study a situation where two players first choose a sharing rule, then invest into a joint production process, and then split joint benefits. We investigate how social preferences determine investments. In our experiment we find that even the materially disadvantaged player cares more for...
Persistent link: https://www.econbiz.de/10010266106
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On the legitimacy of coercion for the financing of public goods
Bierbrauer, Felix - 2009
The literature on public goods has shown that efficient outcomes are impossible if participation constraints have to be respected. This paper addresses the question whether they should be imposed. It asks under what conditions efficiency considerations justify that individuals are forced to pay...
Persistent link: https://www.econbiz.de/10010271780
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International trade, factor mobility and the persistence of cultural-institutional diversity
Belloc, Marianna; Bowles, Samuel - 2009
Cultural and institutional differences among nations may result in differences in the ratios of marginal costs of goods in autarchy and thus be the basis of specialization and comparative advantage, as long as these differences are not eliminated by trade. We provide an evolutionary model of...
Persistent link: https://www.econbiz.de/10010271869
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Loss aversion and ex post inefficient renegotiation
Herweg, Fabian; Schmidt, Klaus M. - 2012
-term contract that has to be renegotiated after the realization of the state of the world, they take the initial contract as a …-term contracts. First, it explains why parties often abstain from writing a beneficial long-term contract or why some contracts … allocation of ownership rights to protect relationship-specific investments rather than writing a specific performance contract …
Persistent link: https://www.econbiz.de/10010291533
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Foreign market entry under incomplete contracts
Seidel, Tobias - 2010
I show in this paper that incomplete contracts affect a firm's decision about serving foreign customers through exports or local sales from an affiliated plant. When contracts between two agents within a firm are too costly to write, the share of multinational firms may be higher or lower...
Persistent link: https://www.econbiz.de/10010274741
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Incomplete contracts and the impact of globalization on consumer welfare
Defever, Fabrice - 2011
We embed a North-South trade model into an incomplete contracts setting where the production of heterogeneous firms can be geographically separated. When a Northern headquarter contracts with a Southern supplier instead of a Northern supplier, the presence of international incomplete contracts...
Persistent link: https://www.econbiz.de/10010274807