, and renegotiation. Trade actions are modeled as individual and trade-action-based option contracts ("non-forcing contracts … that, with ex post renegotiation, constraining parties to use "forcing contracts" implies a strict reduction in the set of …

contract renegotiation is a powerful tool for incentive provision, despite the stationarity of the environment. Continuation … contracts are renegotiated away. This form of anticipated renegotiation results in welfare improvements over outcomes attainable … shown to satisfy various concepts of renegotiation‐proofness. …