Unforeseen contingency and renegotiation with asymmetric information

• 成果类型: Article
• 署名作者: Lee, Jihong
• 署名单位: University of London; Birkbeck University London; Yonsei University
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2008.02137.x
• 发表日期: 2008
• 页码: 678-694
• 关键词: incomplete contracts; equilibrium

摘要

This article considers a buyer-seller contracting model in which the seller possesses private information about all relevant aspects of the state of nature, including how much each action is worth to the buyer. I argue that, given asymmetric information, the buyer may not entirely dismiss an unforeseen contingency claim by the seller. Then, if the buyer lacks the foresight/awareness to 'expect the unexpected', the model admits an equilibrium in which a seemingly complete contract is written and then renegotiated along its outcome path to generate inefficiency ex post.