Exit options in incomplete contracts with asymmetric information

• 成果类型: Article
• 署名作者: Bester, Helmut; Kraehmer, Daniel
• 署名单位: University of Bonn; Free University of Berlin
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2012.05.008
• 发表日期: 2012
• 页码: 1947-1968
• 关键词: incomplete contracts; asymmetric information; option contracts

摘要

This paper analyzes bilateral contracting in an environment with contractual incompleteness and asymmetric information. One party (the seller) makes an unverifiable quality choice and the other party (the buyer) has private information about its valuation. A simple deterministic exit option contract, which allows the buyer to refuse trade, achieves the first-best in the benchmark cases where either quality is verifiable or the buyer's valuation is public information. But, when unverifiable and asymmetric information are combined, deterministic contracts are necessarily inefficient. The first-best can be achieved, however, through simple message games with stochastic terms of trade as off-equilibrium outcomes. (C) 2012 Elsevier Inc. All rights reserved.