court. An active court can improve on the outcome that the parties would achieve without it. The institutional role of the … court is to maximize the parties' welfare under a veil of ignorance. We study a buyer-seller model with risk-neutral agents … and asymmetric information. The court must decide when to uphold a contract and when to void it. The parties know their …

court. An active court can improve on the outcome that the parties would achieve without it. The institutional role of the … court is to maximize the parties' welfare under a veil of ignorance. We study a buyer-seller multiple-widget model with risk …-neutral agents, asymmetric information and ex-ante investments. The court must decide when to uphold a contract and when to void it …