This paper examines a contractual settingwith unverifiable investment and a durable trading opportunity, in which trade can take place in any one of an infinite number of periods. The contractual setting features cross-investment, meaning that the seller’s investment affects the buyer’s...

This paper examines a class of contractual relationships with specific investment, a non-durable trading opportunity, and renegotiation. Trade actions are modeled as individual and trade-actionbased option contracts (“non-forcing contracts”) are explored. The paper identifies an important...