Incorporating unawareness into contract theory

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Incorporating Unawareness into Contract Theory∗

Asymmetric awareness of the contracting parties regarding the uncertainty surrounding them is proposed as a reason for incompleteness in contractual forms. An insurance problem is studied between a risk neutral insurer, who has superior awareness regarding the nature of the uncertainty, and a risk averse insuree, who cannot foresee all the relevant contingencies. The insurer can mention in a co...

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ژورنال

عنوان ژورنال: Games and Economic Behavior

سال: 2012

ISSN: 0899-8256

DOI: 10.1016/j.geb.2012.05.009