Simple contracts, renegotiation under asymmetric information, and the hold-up problem
نویسنده
چکیده
In this article it is demonstrated that voluntary bargaining over a collective decision under asymmetric information may well lead to ex post e$ciency if the default decision is non-trivial. It is argued that the default decision may be interpreted as a &simple' contract that the parties have written ex ante. This result is used in order to show that simple unconditional contracts which are renegotiated may allow the hold-up problem to be solved, even if the parties' valuations are private information. 2002 Elsevier Science B.V. All rights reserved. JEL classixcation: D23; D82; L14
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