What does contract negotiation look like when some parties hold private information and negotiation frictions are …

-invest in early construction, seeking a renegotiation thereafter. We show that, in a renegotiation-proof contract, the marginal …

, they behave as though bound and almost always follow up with a formal contract with terms that closely resemble the non …-binding agreement's terms. Scholars and courts have long treated preliminary agreements as contract-like tools that parties will enforce … for contract theory, contract enforcement, and deal design …

-seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant … threatpoints. We compare situations in which an initial contract is renegotiated to strategically equivalent bargaining situations … in which no ex ante contract was written. The ex ante contract causes sellers to ask for markups that are 45 percent …