, and renegotiation. Trade actions are modeled as individual and trade-action-based option contracts ("non-forcing contracts …-forcing dual-option contract, the party without the trade action is made residual claimant with regard to the investment action … not attainable but the dual-option contract is still optimal in a wide class of settings. More generally, the paper shows …

good or service supplied. At each point in time, either player may unilaterally demand a renegotiation of the contract …, involving renegotiation costs for both players. Players’ payoffs from trade under the contract, as well as from a renegotiated … is to require a renegotiation when the contract payment relative to the outcome of a renegotiation passes a certain …

show that this feature is crucial for debt renegotiation models to explain corporate policies and debt prices. Specifically … debt control premiums, and predicts realistic renegotiation timing policies. Incorporating both renegotiation events also …

renegotiation and relationship-specific investment by the buyer and the seller. As demonstrated by Edlin and Reichelstein (1996), no … contract that specifies only a fixed quantity and a fixed per-unit price can induce efficient investment if marginal cost is … risk of breaching, the first best becomes attainable with a simple price-quantity contract. …