Report
Contracting still matters! Or: How to design a letter of intent
| العنوان: | Contracting still matters! Or: How to design a letter of intent |
|---|---|
| المؤلفون: | Evelyn Korn, Stephan Meisenzahl |
| المجموعة: | RePEc (Research Papers in Economics) |
| الوصف: | Any cooperation that profits from relation-specific investments suffers from the well-known hold-up problem. If investments are not enforceable by an outside authority, the gains fall prey to individual opportunism caused by a free-rider problem. If, in addition, individual investments exhibit positive cross effects, Che and Hausch (1999) provide a negative result and show that contracts cannot overcome the hold up due to a lack of verifiable commitment. This paper develops a mechanism that provides such a commitment device: (1) It introduces an acknowledgement game that procures reliable. (2) It embeds the original contracting problem into two institutional designs - a market based one and a private design - that support enforcement. These two devices reestablish efficient investments as enforceable results of a contract. |
| نوع الوثيقة: | report |
| اللغة: | unknown |
| Relation: | https://www.uni-marburg.de/en/fb02/research-groups/economics/macroeconomics/research/magks-joint-discussion-papers-in-economics/papers/2009-papers/09-2009_korn.pdf |
| الاتاحة: | https://www.uni-marburg.de/en/fb02/research-groups/economics/macroeconomics/research/magks-joint-discussion-papers-in-economics/papers/2009-papers/09-2009_korn.pdf |
| رقم الانضمام: | edsbas.C5E7F639 |
| قاعدة البيانات: | BASE |
| الوصف غير متاح. |