| 来源类型 | Discussion paper
|
| 规范类型 | 论文
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| 来源ID | DP9874
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| DP9874 Incomplete Contracting, Renegotiation, and Expectation-Based Loss Aversion |
| Heiko Karle; Fabian Herweg
|
| 发表日期 | 2014-03-09
|
| 出版年 | 2014
|
| 语种 | 英语
|
| 摘要 | We consider a simple trading relationship between an expectation-based loss-averse buyer and profit-maximizing sellers. When writing a long-term contract the parties have to rely on renegotiations in order to ensure materially efficient trade ex post. The type of the concluded long-term contract affects the buyer's expectations regarding the outcome of renegotiation. If the buyer expects renegotiation always to take place, the parties are always able to implement the materially efficient good ex post. It can be optimal for the buyer, however, to expect that renegotiation does not take place. In this case, a good of too high quality or too low quality is traded ex post. Based on the buyer's expectation management, our theory provides a rationale for ``employment contracts'' in the absence of non-contractible investments. Moreover, in an extension with non-contractible investments, we show that loss aversion can reduce the hold-up problem. |
| 主题 | Industrial Organization
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| 关键词 | Behavioral contract theory
Expectation-based loss aversion
Incomplete contracts
Renegotiation
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| URL | https://cepr.org/publications/dp9874
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| 来源智库 | Centre for Economic Policy Research (United Kingdom)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/538708
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推荐引用方式
GB/T 7714 |
Heiko Karle,Fabian Herweg. DP9874 Incomplete Contracting, Renegotiation, and Expectation-Based Loss Aversion. 2014.
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