Contracts as reference points
by Oliver Hart
"We argue that a contract provides a reference point for a trading relationship: more precisely, for parties' feelings of entitlement. A party's ex post performance depends on whether he gets what he is entitled to relative to outcomes permitted by the contract. A party who is shortchanged shades on performance. A flexible contract allows parties to adjust their outcome to uncertainty, but causes inefficient shading. Our analysis provides a basis for long-term contracts in the absence of noncontractible investments, and elucidates why “employment” contracts, which fix wage in advance and allow the employer to choose the task, can be optimal"--John M. Olin Center for Law, Economics, and Business web site.
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Contracts as reference points
2006, National Bureau of Economic Research
electronic resource /
in English
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Edition Notes
Title from PDF file as viewed on 3/16/2007.
Includes bibliographical references.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.
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- Created September 22, 2008
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| December 19, 2020 | Edited by MARC Bot | import existing book |
| July 29, 2012 | Edited by VacuumBot | Updated format '[electronic resource] /' to 'Electronic resource' |
| December 15, 2009 | Edited by WorkBot | link works |
| October 28, 2008 | Edited by ImportBot | Found a matching Library of Congress MARC record |
| September 22, 2008 | Created by ImportBot | Imported from Library of Congress MARC record |