Anderlini, Luca and Felli, Leonardo (1996) Costly contingent contracts. TE/1996/313. Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science, London, UK.
Full text not available from this repository.Abstract
We identify and investigate the basic ?hold-up? problem which arises whenever each party to a contingent contract has to pay some ex-ante cost for the contract to become feasible. We then proceed to show that, under plausible circumstances, a ?contractual solution? to this hold-up problem is not available. This is because a contractual solution to the hold-up problem typically entails writing a ?contract over a contract? which generates a fresh set of ex-ante costs, and hence is associated with a new hold-up problem. We conclude the paper investigating two applications of our results to a static and to a dynamic principal-agent model.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://sticerd.lse.ac.uk/ |
| Additional Information: | © 1996 Luca Anderlini, Leonardo Felli |
| Subjects: | H Social Sciences > HB Economic Theory |
| Sets: | Research centres and groups > Financial Markets Group (FMG) Collections > Economists Online Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) Departments > Economics Collections > LSE Financial Markets Group (FMG) Working Papers |
| Date Deposited: | 28 Feb 2008 |
| Last Modified: | 27 Feb 2014 15:36 |
| URI: | http://eprints.lse.ac.uk/id/eprint/3598 |
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