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The incentive to call for contract renewal to adjust prices is considered from a bilateral perspective in a setting … encompassing several contract forms is formulated, and the existence of an equilibrium to the bilateral renewal game is established …. Prices display inertia, and the incumbent contract is found to be more resistant to changes in outside opportunities, the …
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Time-inconsistent, present-biased agents may hold commitment assets hoping to keep their current and future present bias in check. Paternalistic governments, in an effort to help such people, routinely offer commitment machinery such as restrictions (or bans) on early withdrawals from...
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