Games | |
Noncontractible Investments and Reference Points | |
关键词: incomplete contracts; noncontractible investments; reference points; asset ownership; | |
DOI : 10.3390/g4030437 | |
来源: mdpi | |
【 摘 要 】
We analyze noncontractible investments in a model with shading. A seller can make an investment that affects a buyer’s value. The parties have outside options that depend on asset ownership. When shading is not possible and there is no contract renegotiation, an optimum can be achieved by giving the seller the right to make a take-it-or-leave-it offer. However, with shading, such a contract creates deadweight losses. We show that an optimal contract will limit the seller’s offers, and possibly create ex post inefficiency. Asset ownership can improve matters even if revelation mechanisms are allowed.
【 授权许可】
CC BY
© 2013 by the authors; licensee MDPI, Basel, Switzerland.
【 预 览 】
Files | Size | Format | View |
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RO202003190034139ZK.pdf | 461KB | download |