Brandts, Jordi; Charness, Gary; Ellman, Matthew - Barcelona Graduate School of Economics (Barcelona GSE) - 2012
inflexible contracts in a bilateral trade context where sellers can adjust trade quality after observing a post-contractual cost … shock and a discretionary buyer transfer. In the absence of communication, we find that rigid contracts are more frequent … and lead to higher earnings for both buyer and seller. By contrast, in the presence of communication, flexible contracts …