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Accounting Conservatism and Debt Contracts: Efficient Liquidation and Covenant Renegotiation

Li, Jing - 2009

whether renegotiation occurs and if so, at what cost. When the covenant is not renegotiable or when renegotiation cost is … sufficiently high, more conservative accounting actually reduces the efficiency of debt contracts. When renegotiation cost is small … circumstances, especially for firms with fewer positive NPV projects and higher liquidation values. When renegotiation is costless …

Persistent link: https://www.econbiz.de/10009441096

Job Protection, Minimum Wage and Unemployment

Zylberberg, André; Cahuc, Pierre - 1999

We analyze how wage setting institutions and job-security provisions interact on unemployment. The assumption that wages are renegotiated by mutual agreement only is introduced in a matching model with endogenous job destruction – la Mortensen and Pissarides (1994) in order to get wage...

Persistent link: https://www.econbiz.de/10010262316

Redundancy Payments, Incomplete Labor Contracts, Unemployment and Welfare

Cahuc, Pierre; Zylberberg, André - 1999

It is frequently argued that pure government-mandated severance transfers by the employer to the worker have neither employment nor welfare effect because they can be offset by private transfers from the worker to the employer. In this paper, using a dynamic search and matching model a la...

Persistent link: https://www.econbiz.de/10010262317

Should Contractual Clauses that Forbid Renegotiation Always be Enforced?

Schmitz, Patrick W. - 2005

demonstrates that it may well be socially desirable not to enforce contractual terms that explicitly prevent renegotiation, even if … renegotiation can constrain the principal’s abilities to introduce distortions in order to reduce the agent’s rent, so that the …

Persistent link: https://www.econbiz.de/10010263148

Expectation Damages, Divisible Contracts, and Bilateral Investment

Ohlendorf, Susanne - 2006

We consider a bilateral trade setting with costless renegotiation and investment by both the buyer and the seller …

Persistent link: https://www.econbiz.de/10010263181

Testing out contractual incompleteness : evidence from soccer

Carbonell-Nicolau, Oriol; Comin, Diego - 2005

The theory of incomplete contracting is rival to that of complete contracting as a frame of reference to understand contractual relationships. Both approaches rest upon diametrically opposed postulates and lead to very different policy conclusions. From a theoretical viewpoint, scrutiny of the...

Persistent link: https://www.econbiz.de/10010263264

Strategic effects of incomplete and renegotiation-proof contracts

Koçkesen, Levent; Gerratana, Emanuele - 2009

analyze the equilibrium outcomes of twostage games with renegotiation-proof third-party contracts in relation to the … outcomes of the game without contracts. Introducing renegotiation, in general, imposes further constraints and in some games …

Persistent link: https://www.econbiz.de/10010273661

Renegotiation without holdup: anticipating spending and infrastructure concessions

Engel, Eduardo M. R. A.; Fischer, Ronald D.; Galetovic, … - 2006

Infrastructure concessions are frequently renegotiated after investments are sunk, resulting in better contractual terms for the franchise holders. This paper offers a political economy explanation for renegotiations that occur with no apparent holdup. We argue that they are used by political...

Persistent link: https://www.econbiz.de/10010273785

The role of financial information, social capital and reputation in lender decisions

Maier, Michael Shane - 2009

This Thesis contains three essays on the economic behavior of individuals. The first essay, co-authored with Andreas Blume and Douglas DeJong is an experimental investigation into the contribution of cognition in a strategic setting where the goal is to coordinate by choosing different courses...

Persistent link: https://www.econbiz.de/10009466072

Optimal delegation and information transmission under limited awareness

Auster, Sarah; Pavoni, Nicola - In: Theoretical Economics 19 (2024) 1, pp. 245-284

information rents. We further show that the principal may use the option of renegotiation as a tool to implement actions that are …

Persistent link: https://www.econbiz.de/10014536865