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Friday, July 24, 2020 | History

2 edition of How do informal agreements and renegotiation shape contractual reference points? found in the catalog.

How do informal agreements and renegotiation shape contractual reference points?

Ernst Fehr

How do informal agreements and renegotiation shape contractual reference points?

by Ernst Fehr

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  • 4 Currently reading

Published by National Bureau of Economic Research in Cambridge, MA .
Written in English


Edition Notes

StatementErnst Fehr, Oliver D. Hart, Christian Zehnder
SeriesNBER working paper series -- working paper 17545, Working paper series (National Bureau of Economic Research : Online) -- working paper no. 17545.
ContributionsHart, Oliver D., Zehnder, Christian, National Bureau of Economic Research
Classifications
LC ClassificationsHB1
The Physical Object
FormatElectronic resource
ID Numbers
Open LibraryOL25173138M
LC Control Number2011657454

Can Contracts Solve the Hold-up Problem? (). Contracts as Reference Points (). How Do Informal Agreements and Renegotiation Shape Contractual Reference Points?” mimeo. (). Incomplete Contracts and Renegotiation: Evidence from a Field Audit.”. How Do Informal Agreements and Revision Shape Contractual Reference Points? Ernst Fehr, Oliver Hart, and Christian Zehnder * January Abstract. The notion of contracts as reference points provides the basis for a deeper understanding of important phenomena such as the employment contract, vertical integration, firm scope, authority and.

Ernst Fehr has been Professor of Microeconomics and Experimental Economics at the University of Zürich since He was director of the Institute for Empirical Research in Economics and is pres-ently chairman of the Department of Economics at the University of Zurich, where he also serves as director of the UBS International Center of Economics in Society. We propose a theory of ex post inefficient renegotiation that is based on loss aversion. When two parties write a long-term contract that has to be renegotiated after the realization of the state of the world, they take the initial contract as a reference point to which they compare gains and losses of the renegotiated transaction. We show that loss aversion makes the renegotiated outcome.

  The notion of contracts as reference points provides the basis for a deeper understanding of important phenomena such as the employment contract, vertical integration, firm scope, authority, and delegation. Previous experiments lend support to this notion but they ignore realistic aspects of trading relationships such as informal agreements and ex‐post renegotiation or revision. . How Do Informal Agreements and Renegotiation Shape Contractual Reference Points? (NBER Working Paper No. ) Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore's () theory of contractual reference points.


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How do informal agreements and renegotiation shape contractual reference points? by Ernst Fehr Download PDF EPUB FB2

How Do Informal Agreements and Renegotiation Shape Contractual Reference Points. Ernst Fehr, Oliver D. Hart, Christian Zehnder. NBER Working Paper No. Issued in October NBER Program(s):Corporate Finance, Law and Economics Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore ()'s theory of contractual reference by: How Do Informal Agreements and Renegotiation Shape Contractual Reference Points.

Ernst Fehr, Oliver Hart, and Christian Zehnder* October Abstract Recent theoretical and empirical studies suggest that contractual reference points have important implications for Cited by: How Do Informal Agreements and Renegotiation Shape Contractual Reference Points?* Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore ()’s theory of contractual reference points.

However, existing studies ignore realistic aspects of trading relationships such as informal. How Do Informal Agreements and Renegotiation Shape Contractual Reference Points.

Our evidence indicates that the central behavioral mechanism underlying the concept of contractual reference points is robust to the presence of informal agreements and ex post renegotiation.

However, our data also reveal new behavioral features Cited by: IZA DP No. How Do Informal Agreements and Renegotiation Shape Contractual Reference Points. Ernst Fehr, Oliver Hart, Christian Zehnder Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore ()’s theory of contractual reference points.

Here we show that the central behavioral mechanism underlying contractual reference points is robust to such considerations. Our data reveal that informal agreements can mitigate the trade-off between rigidity and flexibility but they do not fully resolve the problem of misaligned reference by: Hart and Moore () point out that the idea of managing reference points through informal agreements has some force, but they argue that asymmetric information in combination with self-serving biases may limit the impact of such agreements considerably.

Our results illustrate that (at least in certain environments) asymmetric information is. Downloadable (with restrictions).

The notion of contracts as reference points provides the basis for a deeper understanding of important phenomena such as the employment contract, vertical integration, firm scope, authority, and delegation.

Previous experiments lend support to this notion but they ignore realistic aspects of trading relationships such as informal agreements and ex-post. of trading relationships such as informal agreements and ex-post renegotiation or revision. Here we show that the central behavioral mechanism underlying contractual reference points is robust to such considerations.

Our data reveal that informal agreements can mitigate the trade-off between. Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore ()’s theory of contractual reference points.

However, existing studies ignore realistic aspects of trading relationships such as informal agreements and ex post renegotiation. BibTeX @MISC{Fehr11oflaborhow, author = {Ernst Fehr and Oliver Hart and Christian Zehnder and Ernst Fehr and Oliver Hart and Christian Zehnder}, title = {of LaborHow Do Informal Agreements and Renegotiation Shape Contractual Reference Points?}, year = {}}.

Our evidence indicates that the central behavioral mechanism underlying the concept of contractual reference points is robust to the presence of informal agreements and ex post renegotiation.

How do informal agreements and renegotiation shape contractual reference points. Authors: Fehr, Ernst Hart, Oliver Zehnder, Christian. Year of Publication: Series/Report no.: Working Paper The notion of contracts as reference points provides the basis for a deeper understanding of important phenomena such as the employment contract, vertical integration, firm scope, authority and delegation.

Previous experiments lend support to this notion but they ignore realistic aspects of trading relationships such as informal agreements and ex post renegotiation or revision. As a result, high rent-extraction power rates were also observed in renegotiation environments.

These findings are aligned with recent literature on contractual reference points and renegotiation. of trading relationships such as informal agreements and ex post renegotiation or revision.

Here we show that the central behavioral mechanism underlying contractual reference points is robust to such considerations.

Our data reveal that informal agreements can mitigate the trade-off between rigidity and exibility but they do not fully resolve. relationships such as informal agreements and ex post renegotiation or revision.

Here we show that the central behavioral mechanism underlying contractual reference points is robust to such considerations. Our data reveal that informal agreements can. Fehr, Ernst, Oliver Hart, and Christian Zehnder. “Contracts as Reference Points – Experimental Evidence.” American Economic Review, (2), Fehr, Ernst, Oliver Hart, and Christian Zehnder.

“How Do Informal Agreements and Renegotiation Shape Contractual Reference Points?” mimeo. Fehr, Ernst and Klaus M. Schmidt. “ How Do Informal Agreements and Renegotiation Shape Contractual Reference Points?” Journal of the European Economic Association 13 (1): 1 –[Web of Science ®], [Google Scholar]) belong to the behavioural incomplete contract theory and its experiment.

Their main context is the buyer-supplier transactional relationship, not the. How do informal agreements and renegotiation shape contractual reference points?. [Ernst Fehr; Oliver D Hart; Christian Zehnder; National Bureau of Economic Research.] -- Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore ()'s theory of contractual reference points.HOW DO INFORMAL AGREEMENTS AND REVISION SHAPE CONTRACTUAL REFERENCE POINTS?

Ernst Fehr (), Oliver Hart and Christian Zehnder (). Journal of the European Economic Association,vol. 13, issue 1, Abstract: The notion of contracts as reference points provides the basis for a deeper understanding of important phenomena such as the employment contract.abstract from informal agreements, arguing that subjective interpretations of states and self-serving biases make it unlikely that non-enforceable agreements could shape reference points significantly.

However, ultimately the role of informal agreements for contractual reference points is an empirical question that deserves a rigorous.