منابع مشابه
Leveled Commitment Contracts and Strategic Breach
Ž . In automated negotiation systems for self-interested agents, contracts have traditionally been binding. They do not accommodate future events. Contingency contracts address this, but are often impractical. As an alternative, we propose le eled commitment contracts. The level of commitment is set by breach penalties. To be freed from the contract, an agent simply pays the penalty to the othe...
متن کاملThe role of installment payments in contracts for services
This article studies the role of installment payments in relationships characterized by moral hazard and sunk costs. We rule out vertical integration and payments contingent on the product of the contractor. Instead, each payment is negotiated as and when made. In such circumstances, an initial (down)payment serves to redress the weakness of the contractor in ex post renegotiations. Ifhigher ef...
متن کاملPricing Installment Options with an Application to ASX Installment Warrants
Installment options are Bermudan-style options where the holder periodically decides whether to exercise or not and then to keep the option alive or not (by paying the installment). We develop a dynamic programming procedure to price installment options. We derive the range of installments within which the installment option is not redundant with the European contract. Simulations analysis show...
متن کاملImplications of Breach Remedy and Renegotiation for Design of Supply Contracts
A manufacturer writes supply contracts with N buyers. Then, the buyers invest in product development and marketing, and the manufacturer builds capacity. Finally, demand is realized, and the ...rms renegotiate the supply contracts to achieve an e¢cient allocation of capacity among the buyers. The court remedy for breach of contract (speci...c performance versus expectation damages) a¤ects how t...
متن کاملInstallment Options and Static Hedging
An installment option is a European option in which the premium, instead of being paid up-front, is paid in a series of installments. If all installments are paid the holder receives the exercise value, but the holder has the right to terminate payments on any payment date, in which case the option lapses with no further payments on either side. We discuss pricing and risk management for these ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Supreme Court Economic Review
سال: 2018
ISSN: 0736-9921,2156-6208
DOI: 10.1086/704390