We propose a theory of ex post inefficient renegotiation that is based on loss aversion. When two parties write a long …

renegotiation. If the buyer expects renegotiation always to take place, the parties are always able to implement the materially … efficient good ex post. It can be optimal for the buyer, however, to expect that renegotiation does not take place. In this case …

We propose a theory of inefficient renegotiation that is based on loss aversion. When two parties write a long …

unobservable and incomplete contracts with and without renegotiation opportunities under the assumption that the principal cannot … outcomes to a subset of Nash equilibrium outcomes and renegotiation imposes further constraints. Yet, there is a large class of …