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Hold-Up, Asset Ownership, and Reference Points
Hart, Oliver - 2010
We study two parties who desire a smooth trading relationship under conditions of value and cost uncertainty. A rigid contract fixing price works well in normal times since there is nothing to argue about. However, when value or cost is exceptional, one party will hold up the other , damaging...
Persistent link: https://www.econbiz.de/10012759758
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Efficient Regulation
Shleifer, Andrei - 2010
Regulation of economic activity is ubiquitous around the world, yet standard theories predict it should be rather uncommon. I argue that the ubiquity of regulation is explained not so much by the failure of markets, or by asymmetric information, as by the failure of courts to solve contract and...
Persistent link: https://www.econbiz.de/10013148865
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Cycles of Distrust : An Economic Model
Acemoglu, Daron - 2012
We propose a model of cycles of distrust and conflict. Overlapping generations of agents from two groups sequentially … a sequence of bad actions originated. Assuming that both sides are not extremists, spirals of distrust and conflict get … this mechanism can be useful in interpreting cycles of ethnic conflict and international war, and how it also emerges in …
Persistent link: https://www.econbiz.de/10013103053
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Threats Without Binding Commitment
Shavell, Steven; Spier, Kathryn E. - 2021
This paper explores the power of threats in the absence of binding commitment. The threatener cannot commit to carrying out the threat if the victim refuses payment, and cannot commit to not carrying out the threat if payment is made. If exercising the threat is costly to the threatener, then...
Persistent link: https://www.econbiz.de/10013224941
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Liquidation Values and the Credibility of Financial Contract Renegotiation : Evidence from U.S. Airlines
Benmelech, Efraim - 2008
;apos; theory of financial contracting predicts that liquidation values determine the allocation of bargaining power between … such bargaining. This paper attempts to fill this gap. We develop an incomplete-contracting model of financial contract …
Persistent link: https://www.econbiz.de/10012771713
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Sequential Bargaining in the Field : Evidence from Millions of Online Bargaining Interactions
Backus, Matthew - 2018
We study patterns of behavior in bilateral bargaining situations using a rich, new dataset describing over 88 million … listings from eBay's Best Offer platform, with back-and-forth bargaining occurring in over 25 million of these listings. We … document patterns of behavior and relate them to "rational" and "psychological" theories of bargaining and find that bargaining …
Persistent link: https://www.econbiz.de/10012925284
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Learning and Disagreement in an Uncertain World
Acemoglu, Daron - 2010
trading and bargaining …
Persistent link: https://www.econbiz.de/10012760581
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Contagion During the Initial Banking Panic of the Great Depression
Heitfield, Erik - 2017
The initial banking crisis of the Great Depression has been the subject of debate. Some scholars believe a contagious panic spread among financial institutions. Others argue that suspensions surged because fundamentals, such as losses on loans, drove banks out of business. This paper nests those...
Persistent link: https://www.econbiz.de/10012950840
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The Macroeconomics of Sticky Prices with Generalized Hazard Functions
Alvarez, Fernando; Lippi, Francesco; Oskolkov, Aleksei - 2022
We give a thorough analytic characterization of a large class of sticky-price models where the firm’s price setting behavior is described by a generalized hazard function. Such a function provides a tractable description of the firm’s price setting behavior and allows for a vast variety of...
Persistent link: https://www.econbiz.de/10013310816
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Fiduciary Duties and Equity-Debtholder Conflicts
Becker, Bo - 2011
We use an important legal event as a natural experiment to examine the effect of management fiduciary duties on equity-debt conflicts. A 1991 Delaware bankruptcy ruling changed the nature of corporate directors' fiduciary duties in firms incorporated in that state. This change limited managers'...
Persistent link: https://www.econbiz.de/10013117403