Showing 1 - 10 of 16
We develop a theoretical model to identify and compare partial and equilibrium effects of uncertainty and the magnitude of fines on punishment and deterrence. Partial effects are effects on potential violators' and punishers' decisions when the other side's behavior is exogenously given....
Persistent link: https://www.econbiz.de/10011350821
If a seller delivers a good non-conforming to contract, European and US warranty law allows consumers to choose between some money transfer and termination. Termination rights are, however, widely criticized, mainly for fear that the buyer may use non-conformity as a pretext for getting rid of a...
Persistent link: https://www.econbiz.de/10010333733
The legal notion of damages requires to compare the actual value of the creditor's assets with the hypothetical value that would have prevailed if the debtor had met his obligation. Moreover, values and causation may be uncertain. If nature's contribution is modelled as a random move then the...
Persistent link: https://www.econbiz.de/10010333739
A party dissatisfied with the contractual performance of a counterparty is typically able to pursue a variety of legal recourses. Within this apparent variety lurk two fundamental alternatives. The aggrieved party may (i) 'affirm' the contract and seek money damages or specific performance; or...
Persistent link: https://www.econbiz.de/10010333753
The acquisition of information prior to sale gives rise to a hold-up situation quite naturally. Yet, while the bulk of the literature on the hold-up problem considers negotiations under symmetric information where cooperative short-cuts such as split the difference capture the outcome of...
Persistent link: https://www.econbiz.de/10010333825
In economic approaches it is often argued that reputation considerations influence the behavior of individuals or firms and that reputation influences the outcome of markets. Empirical evidence is rare though. In this contribution we argue that a positive reputation of sellers should have an...
Persistent link: https://www.econbiz.de/10010333919
A setting of reliance investments is explored where one of the parties to a contract obtains private information concerning his utility or cost function that remains hidden to the other party and to courts. As a consequence, it will be a difficult task to award expectation damages corrrectly to...
Persistent link: https://www.econbiz.de/10010333934
The present paper examines an injurer causing a temporary blackout to a firm as the primary victim but also affecting customers and competitors of the firm. Reflecting existing legal practice, the paper investigates efficiency properties of the negligence rule granting recovery of private losses...
Persistent link: https://www.econbiz.de/10010333944
Lecture on the first SFB/TR 15 meeting, Gummersbach, July, 18 - 20, 2004: This paper revisits the economic analysis of contract law for a setting of cooperative investments. While Che and Chung (1999) have shown that expectation damages perform rather poorly, the present paper argues that this...
Persistent link: https://www.econbiz.de/10010333997
This paper examines the efficiency of expectation damages as a breach remedy in a bilateral trade setting with renegotiation and relationship-specific investment by the buyer and the seller. As demonstrated by Edlin and Reichelstein (1996), no contract that specifies only a fixed quantity and a...
Persistent link: https://www.econbiz.de/10010334024