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How do liquidation values affect financial contract renegotiation? While the 'incomplete contracting' theory of financial contracting predicts that liquidation values determine the allocation of bargaining power between creditors and debtors, there is little empirical evidence on financial...
Persistent link: https://www.econbiz.de/10012464587
This survey provides an overview of theoretical and empirical research on information flows in corporations. It highlights key frictions preventing effective information flows and discusses how organizational structure and corporate governance can alleviate these frictions, focusing on three...
Persistent link: https://www.econbiz.de/10014287310
facilitate negotiations. Consistent with experimental and behavioral studies on fairness perceptions, we find that individuals …We discuss self-interested uses of equity arguments in international climate negotiations. Using unique data from a … arguments may be perceived as being used for different reasons, for example, out of fairness considerations or in order to …
Persistent link: https://www.econbiz.de/10012463718
Meritocracies that aim to identify high-ability bureaucrats are less effective when performance is imperfectly observed. First, we show meritocratic governments forgo output maximization when they design incentives that screen for ability. This trade-off has empirical implications that reveal...
Persistent link: https://www.econbiz.de/10012456711
We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. In spite of its simplicity, the model yields rich predictions on the structure of the optimal trade agreement and how this depends on the fundamentals of the...
Persistent link: https://www.econbiz.de/10012465915
Persistent link: https://www.econbiz.de/10012467220
Why are contracts incomplete? Transaction costs and bounded rationality cannot be a total explanation since states of the world are often describable, foreseeable, and yet are not mentioned in a contract. Asymmetric information theories also have limitations. We offer an explanation based on...
Persistent link: https://www.econbiz.de/10012459661
negotiation behavior in theory and practice. For the median product, bargaining ends in impasses in 43% of negotiations even when …
Persistent link: https://www.econbiz.de/10012616649
settings include negotiations for used cars, insurance injury claims, a TV game show, auto rickshaw rides, housing … setting that point to split-the-difference offers as a strong social norm, whether in high-stakes or low-stakes negotiations …
Persistent link: https://www.econbiz.de/10012599401
Bargaining breakdown--whether as delay, conflict, or missing trade--plagues bargaining in environments with incomplete information. Can a bargaining environment that facilitates or restricts communication alleviate these costs? We exploit a unique opportunity to study this question using real...
Persistent link: https://www.econbiz.de/10012482204