In our paper we consider situations in which the parties are in disagreement about the allocation of a certain risk, and either party could have acted ex-ante to prevent breach, to lower its probability or to insure against it, but neither did so. When the state-of-the-world is revealed there...

When investments are nonverifiable, inducing cooperative investments with simple contracts may not be as difficult as previously thought. Indeed, modeling "expectation damages" close to legal practice, we show that the default remedy of contract law induces the first best. Yet, in order to lower...

Well-functioning markets and contract law -- The moral consequences of well-functioning markets -- Contract law, efficiency, and morality -- Consideration -- Remedies -- Boilerplate -- Pernicious markets and the limits of contract law