141 research outputs found

    `Breaking and entering' of contracts as a matter of bargaining power and exclusivity clauses

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    We analyze the effect of liquidated damage rules in exclusive contracts that are negotiated in a sequential bargaining process between one seller and two buyers with endogenous outside options. We show that assumptions on the distribution of bargaining power influence the size of the payment of damages and determine which contractual party benefits from including liquidated damage rules. Furthermore, we show that the effect of the payment of damages on the efficiency of the consummated deals depends on the possibility to sign more than one contract. Only if this is not possible, damage rules may prevent the breaking and entering of contracts and thus lead to inefficient deals in the market of corporate control, or allow for `naked' exclusion in the context of supplier contracts with externalities.sequential bargaining, bargaining power, outside option, liquidated damage rules, termination fees, exclusivity agreements

    Can Coasean bargaining justify Pigouvian taxation?

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    The fact that according to the celebrated Coase Theorem rational parties always try to exploit all gains from trade is usually taken as an argument against the necessity of government intervention through Pigouvian taxation in order to correct externalities. However, we show that the hold-up problem, which occurs if non-verifiable investments have external effects and parties cannot be prevented from always exploiting ex post gains from trade through Coasean bargaining, may be solved by government intervention. In this sense, the impossibility to rule out Coasean bargaining (after investments are sunk) may in fact justify Pigouvian taxation.Hold-up problem, Bargaining, Contracts, Taxation, Externalities

    Book Review of “Bargaining Theory with Applications” (Muthoo, 1999)

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    In this working paper, A. Muthoo’s book “Bargaining Theory with Applications” is discussed.

    Three is a crowd - inefficient communication in the multi-player electronic mail game

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    In a two-player stag hunt with asymmetric information, players may lock each other into requiring a large number of confirmations and confirmations of confirmations from one another before eventually acting. This intuition has been formalized in the electronic mail game (EMG). The literature provides extensions on the EMG that eliminate inefficient equilibria, suggesting that no formal rules are needed to prevent players from playing inefficiently. The present paper investigates whether these results extend to the multi-player EMG. We show that standard equilibrium refinements cannot eliminate inefficient equilibria. While two players are predicted to play efficiently, many players need formal rules telling them when who talks to whom.Multi-Player Electronic Mail Game, Collective Action, Communication Networks

    Know-how disclosure and incomplete contracts

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    When two parties invest in human capital and at the same time decide on know-how disclosure it can be shown that joint ownership with veto power is the optimal ownership structure, given that only incomplete contracts can be written.Incomplete contracts; Know-how disclosure; Joint ownership

    Exploiting opportunities at all cost? Entrepreneurial intent and externalities

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    Do potential entrepreneurs exploit welfare-destroying opportunities as much as they exploit welfare-enhancing opportunities as it is assumed in several normative models? Do we need to prevent potential entrepreneurs from being destructive or are there intrinsic limits to harm others? We experimentally investigate how people with different entrepreneurial intent exploit risky investment opportunities that are associated with negative and positive externalities. We find that participants who consider entrepreneurship as a future occupation invest significantly less than others in destructive opportunities. Nevertheless, our results support prior evidence that the entrepreneurially talented invest more in destructive opportunities. The latter effect seems to be entrepreneurship-specific, because the investment behavior of the generally more talented does not differ from that of other participants. Taken together, our results suggest that people who are willing to exploit destructive opportunities do not only do this in private ventures, but also - and maybe even more so - in wage employment.Social Psychology, Entrepreneurship, Externalities, Laboratory, Individual Behavior

    Vertikale Unternehmenskooperationen

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    We discuss the literature on vertical relationships between firms from a contract-theoretic perspective.

    The potential link between sugar-sweetened beverage consumption and post-exercise airway narrowing across puberty: a longitudinal cohort study

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    Citation: Emerson, S. R., Rosenkranz, S. K., Rosenkranz, R. R., Kurti, S. P., & Harms, C. A. (2016). The potential link between sugar-sweetened beverage consumption and post-exercise airway narrowing across puberty: a longitudinal cohort study. Public Health Nutrition, 19(13), 2435-2440. doi:10.1017/s1368980015003109Objective The prevalence of asthma is rising, presenting serious public health challenges. Recent data suggest that sugar-sweetened beverage (SSB) consumption plays a role in asthma aetiology. The purpose of the present study was to determine whether SSB consumption is linked to post-exercise airway narrowing (predictor of asthma development) across puberty. Design Participants completed pulmonary function tests, physical activity and dietary habit questionnaires, and an exercise test to exhaustion. Setting Community in Manhattan, Kansas, USA. Subjects We recruited ten boys and ten girls from an original cohort of forty participants tested in our laboratory approximately 5 years prior. Participants were aged 97 (sd 09) years at baseline and 147 (sd 09) years at follow-up. Results Pre-puberty, boys consumed 68 (sd 48) servings/week and girls consumed 69 (sd 37) servings/week, while post-puberty boys consumed 115 (sd 53) servings/week and girls consumed 77 (sd 43) servings/week. Using Pearson correlation, SSB consumption was not significantly related to post-exercise airway narrowing at pre-puberty (r=-035, P=0130). In linear regression analyses, SSB consumption was significantly related to post-exercise airway narrowing post-puberty before (standardized =-060, P=0005) but not after (standardized =-033, P=0211) adjustment for confounders. Change in SSB consumption from pre- to post-puberty was significantly associated with post-exercise airway narrowing post-puberty (r=-061, P=0010) and change in post-exercise airway narrowing from pre- to post-puberty (r=-045, P=0048) when assessed via Pearson correlations. Conclusions These findings suggest a possible link between SSB consumption and asthma development during maturation. Reduced SSB intake may be a possible public health avenue for blunting rising asthma prevalence

    Know-how disclosure and incomplete contracts

    Get PDF
    When two parties invest in human capital and at the same time decide on know-how disclosure it can be shown that joint ownership with veto power is the optimal ownership structure, given that only incomplete contracts can be written

    Vertikale Unternehmenskooperationen

    Get PDF
    We discuss the literature on vertical relationships between firms from a contract-theoretic perspective
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