an asset that has greater value if owned by the principal than by the agent. When contracts can be renegotiated, a well … renegotiation. We show that option contracts will achieve the first best whenever this threat-point effect dominates the holdup …

contracts are incomplete. They can eliminate the overinvestment effect identified by Rogerson [1984] and Shavell [1980] when …-front payments with what we call 'Cadillac' contracts (contracts for a very high quality or quantity). This combination provides …

an asset that has greater value if owned by the principal than by the agent. When contracts can be renegotiated, a well … renegotiation. We show that option contracts will achieve the first best whenever this threat-point effect dominates the holdup …

parties can sign noncontingent contracts prior to investing, and can freely renegotiate them after uncertainty about the … desirability of trade is resolved. We find that such contracts can induce one party to invest efficiently when either a breach …

contracts are incomplete. They can eliminate the overinvestment effect identified by Rogerson [1984] and Shavell [1980] when …-front payments with what we call 'Cadillac' contracts (contracts for a very high quality or quantity). This combination provides …