Exploiting future settlements: a signalling model of most-favored-nation clausesin settlement bargaining

• 成果类型: Article
• 署名作者: Daughety, AF; Reinganum, JF
• 署名单位: Vanderbilt University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.2307/1593703
• 发表日期: 2004
• 页码: 467-485
• 关键词: LITIGATION; CONTRACTS; monopoly; POLICY

摘要

Most-favored-nation (MFN) clauses have been used to address a repeat player's time-inconsistency problem in. international trade, durable-goods monopoly pricing, franchise contracting, and settlement bargaining. We argue that a nonrepeat player (an early-bargaining plaint) can use an MFN to profitably modify the subsequent bargaining game between the defendant and a later-bargaining plaintiff. If an MFN is triggered (which. can happen in equilibrium), the early plaintiff receives an additional. payment. Less obviously, the early plaintiff's incentives for information revelation are enhanced by this potential payment, so the defendant can resort to trial less frequently. Conditions exist such that an MFN increases total surplus.