Policy shocks affect the rent distribution in long-term contracts, which can lead to such contracts being renegotiated. We seek an understanding of what aspects of contract design, in the face of a substantial policy shock, affect the propensity to renegotiate. We test our hypotheses using data...

Can incumbent sellers and buyers use contracts with stipulated damages to extract surplus from entrants? We experimentally study the strategic environments of Aghion and Bolton (1987)and Spier and Whinston (1995). As predicted, contract renegotiation weakens the commitment power of stipulated...

Vertical restraints have been subject of lively policy and academic discussions. Scholars associated with the Chicago School challenged early foreclosure doctrines by arguing that vertical restraints primarily reflected efficiency considerations. More recently, industrial organization economists...