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Nitpicky insurers and the law of contracts
Bourgeon, Jean-Marc; Picard, Pierre M. - 2017
that hardly explains the many features of an insurance contract. We extend this setup to include the situation that the … costlessly observable, then it should be included in the contract to improve the risk sharing-incentive trade-off under moral … resulting incompleteness of the contract opens the door to controversies and disputes that may lead to judicial procedures. We …
Persistent link: https://www.econbiz.de/10011723471
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Trust and contracts : empirical evidence
D'Acunto, Francesco; Xie, Jin; Yao, Jiaquan - 2020
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/10012318377
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Under/over-investment and early renegotiation in public-private partnerships
Danau, Daniel; Vinella, Annalisa - 2019
-invest in early construction, seeking a renegotiation thereafter. We show that, in a renegotiation-proof contract, the marginal …
Persistent link: https://www.econbiz.de/10012119945
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Is marriage as good as a contract?
Cigno, Alessandro - 2013
Neither marriage nor a legally enforceable contract serves any useful purpose if the parties have access to a perfect … enforceable contract. Separate-property marriage may reduce and community-property marriage actually eliminate inefficiency, but …
Persistent link: https://www.econbiz.de/10010227229
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Formal contracts, relational contracts, and the holdup problem
Itō, Hideshi (contributor); Morita, Hodaka (contributor) - 2006
Persistent link: https://www.econbiz.de/10003364841
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Relational contracts and trust in a high-tech industry
Calzolari, Giacomo; Felli, Leonardo; Koenen, Johannes; … - 2021
We study how informal buyer-supplier relationships in the German automotive industry affect procurement. Using unique data from a survey focusing on these, we show that more trust, the belief that the trading partner acts to maintain the mutual relationship, is associated with both higher...
Persistent link: https://www.econbiz.de/10012649766
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Relational contracts, the cost of enforcing formal contracts, and capital structure choice : theory and evidence
Fahn, Matthias; Merlo, Valeria; Wamser, Georg - 2017
This paper shows that the cost of enforcing contracts governing non-financial relationships between firms affects a firm's financing structure. We analyze the interaction between a firm's capital structure and the type of contracts it uses to deal with its suppliers. We first develop a...
Persistent link: https://www.econbiz.de/10011674383
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Fairness, incentives and contractual incompleteness
Fehr, Ernst; Klein, Alexander; Schmidt, Klaus M. - 2001
We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that...
Persistent link: https://www.econbiz.de/10011398105
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Reciprocity in dynamic employment relationships
Fahn, Matthias - 2019
This paper explores how a relational contract establishes a norm of reciprocity and how such a norm shapes the …
Persistent link: https://www.econbiz.de/10012002999
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Evolutionary norm enforcement
Güth, Werner; Ockenfels, Axel - 2000
Applying an indirect evolutionary approach with endogenous preference formation, we show that a legal system can induce players to reward trust even if material incentives dictate to exploit trust. By analyzing the crowding out or crowding in of trustworthiness implied by various verdict rules,...
Persistent link: https://www.econbiz.de/10009781609