The "lost-volume" problem in contract law poses a problem of contract design. A seller with market power who faces buyers with private valuations for the subject of sale solves the problem with a combination of a required positive down payment and a later transaction price above cost. This...

Informational and Communication Technologies (ICT) plays a fundamental role for social and economic development. Similarly, it is recognized that there cannot be an effective use of ICT in the absence of a safe and trusted ICT environment. Thus, IT security plays a prime role in helping creating...

Many litigated written contracts require interpretation, but few formal treatments of the interpretive process exist. This paper analyzes welfare-maximizing interpretive rules. It shows that (1) accurate interpretations maximize expected gains by rewarding parties only for compliant...

We study the effect of legal constraints in an environment in which agents face demand shocks they would like to smooth but also have weakness of will: agents' long and short run preferences are misaligned. Some agents are sophisticated--they know they will make inconsistent intertemporal...

Exponential growth in genomics has led to public and private initiatives worldwide that have dramatically increased the number of procreative couples who are aware of their ability to transmit genetic disorders to their future children. Understanding how couples process the meaning of being...

We ask how to regulate pecuniary private benefit consumption. These benefits can compensate controlling shareholders for monitoring managers and investing effort in implementing projects. Controlling shareholders may consume excessive benefits, however. We argue (a) ex post judicial review of...

[eng] This Essay considers the substantive and institutional aspects of an economic theory of contract regulation. It lists the various functions that analysts have assigned to contract regulation and briefly discusses the substantive wisdom and institutional feasibility of performing those...

In most of the contract theory literature, contracting costs are assumed either to be high enough to preclude certain forms of contracting, or low enough to permit any contract to be written. Similarly, researchers usually treat renegotiation as either costless or prohibitively costly. This...

This paper explores how the opportunity to recontract affects investment and trade in contractual relationships when it is assumed that renegotiation is costly. In this world, recontracting retains much of the benefit that has been ascribed to it, including the realization of any surplus that is...