The Option Element in Contracting
نویسنده
چکیده
I. THE IMPORTANCE OF OPTION CONTRACTS ............................ 2191 A. Special Doctrinal Treatment of Option Contracts............ 2192 1. Consideration and Mutuality........................................ 2192 2. Offer and Acceptance.................................................... 2196 3. Performance, Breach, and Damages ........................... 2198 a. Anticipatory Repudiation ....................................... 2198 b. Duty to Mitigate....................................................... 2199 c. Liquidated Damages and Penalties ....................... 2200 B. Remedial Rules Generally................................................... 2201 II. A THEORETICAL ACCOUNT OF OPTION DESIGN.................... 2205 A. Three Essential Terms: Option Premium, Strike Price, and Option Life ................................................................... 2205 B. The Relationship Among Option Premium, Strike Price, and Option Life ................................................................... 2207 C. Efficient Option Design ...................................................... 2211 III. DETERMINANTS OF COMPARATIVE ADVANTAGE IN OPTIONS TRADING..................................................................... 2212 A. Nonefficiency Considerations............................................. 2212 1. Bounded Rationality ..................................................... 2212 2. Market Exclusion .......................................................... 2214 3. Regulatory Arbitrage..................................................... 2216 B. Efficiency Considerations ................................................... 2217 1. Differential Beliefs About the Future or Differential Risk Aversion................................................................. 2217 2. Ex Post Incentives ......................................................... 2218 C. Mixed Explanations............................................................. 2221 1. Ex Ante Information Signaling .................................... 2222
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