{"product_id":"more-is-less-why-parties-may-deliberately-write-incomplete-contracts-paperback-softback-9781009396073","title":"More is Less; Why Parties May Deliberately Write Incomplete Contracts (Paperback \/ softback) 9781009396073","description":"\u003cfont face=\"Georgia\"\u003e\r\n\u003cp\u003e\u003cfont size=\"6\"\u003eMore is Less\u003c\/font\u003e\u003cbr\u003e\r\n\u003cfont size=\"5\"\u003eWhy Parties May Deliberately Write Incomplete Contracts\u003c\/font\u003e\u003c\/p\u003e\r\n\r\n\u003cp\u003e\u003cem\u003eA verifiable contingency provides additional reference points for parties writing incomplete contracts, potentially hindering renegotiation.\u003c\/em\u003e\u003c\/p\u003e\r\n\r\n\r\n\u003cp\u003e\u003cfont size=\"4\"\u003eMaija Halonen-Akatwijuka (Author), Oliver Hart (Author)\u003c\/font\u003e\u003c\/p\u003e\r\n\r\n\u003cp\u003e\u003cfont size=\"3\"\u003e9781009396073, Cambridge University Press\u003c\/font\u003e\u003c\/p\u003e\r\n\r\n\u003cp\u003e\u003cfont size=\"3\"\u003ePaperback \/ softback, published 23 May 2024\u003c\/font\u003e\u003c\/p\u003e\r\n\r\n\u003cp\u003e\u003cfont size=\"3\"\u003e34 pages\u003cbr\u003e22.8 x 15.1 x 0.3 cm, 0.07 kg\u003c\/font\u003e\u003c\/p\u003e\r\n\r\n\r\n\r\n\r\n\r\n\u003cp align=\"justify\"\u003e\u003cstrong\u003e\u003cfont size=\"3\"\u003eWhy are contracts incomplete? Transaction costs and bounded rationality cannot be a total explanation since states of the world are often describable, foreseeable, and yet are not mentioned in a contract. Asymmetric information theories also have limitations. We offer an explanation based on 'contracts as reference points'. Including a contingency of the form, 'The buyer will require a good in event E', has a benefit and a cost. The benefit is that if E occurs there is less to argue about; the cost is that the additional reference point provided by the outcome in E can hinder (re)negotiation in states outside E. We show that if parties agree about a reasonable division of surplus, an incomplete contract is strictly superior to a contingent contract. If parties have different views about the division of surplus, an incomplete contract can be superior if including a contingency would lead to divergent reference points.\u003c\/font\u003e\u003c\/strong\u003e\u003c\/p\u003e\r\n\r\n\u003cp\u003e\u003cfont size=\"3\"\u003e1. Introduction\u003cbr\u003e 2. The model\u003cbr\u003e 3. Is more less?\u003cbr\u003e 4. Large gains in event\u003cbr\u003e 5. Summary and conclusions\u003cbr\u003e Appendix\u003cbr\u003e References.\u003c\/font\u003e\u003c\/p\u003e\r\n\r\n\u003cp\u003e\u003cfont size=\"3\"\u003eSubject Areas: Economics [\u003ca title=\"See our other books on Economics\" href=\"https:\/\/freshlyprintedbooks.co.uk\/search?q=%22Economics%20%5BKC%5D%22\"\u003eKC\u003c\/a\u003e]\u003c\/font\u003e\u003c\/p\u003e\r\n\r\n\r\n\u003c\/font\u003e","brand":"Cambridge University Press","offers":[{"title":"Brand New","offer_id":52413998563608,"sku":"9781009396073","price":17.49,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0730\/2037\/5320\/files\/9781009396073i.jpg?v=1784334812","url":"https:\/\/freshlyprintedbooks.co.uk\/products\/more-is-less-why-parties-may-deliberately-write-incomplete-contracts-paperback-softback-9781009396073","provider":"Freshly Printed Books","version":"1.0","type":"link"}