Bigoni, Maria ORCID: 0000-0001-5988-6115, Bortolotti, Stefania ORCID: 0000-0002-8326-5447, Parisi, Francesco and Porat, Ariel ORCID: 0000-0002-3492-694X (2017). Unbundling Efficient Breach: An Experiment. J. Empir Leg. Stud, 14 (3). S. 527 - 548. HOBOKEN: WILEY. ISSN 1740-1461
Full text not available from this repository.Abstract
Current law and economics scholarship analyzes efficient breach cases monolithically. The standard analysis holds that breach is efficient when performance of a contract generates a negative total surplus for the parties. However, by simplistically grouping efficient breach cases as of a single kind, the prior literature overlooks that gain-seeking breaches might be different from loss-avoiding breaches. To capture these different motives, we designed a novel game called the Contract-Breach Game where we exogenously varied the reasons for the breachpursuing a gain or avoiding a lossunder a specific performance remedy. Results from an incentivized laboratory experiment indicate that the motives behind the breach induce sizable differences in behavior; subjects are less willing to renegotiate when facing gain-seeking than loss-avoiding breaches, and the compensation premium obtained by the promisee is higher. Our analysis suggests that inequality aversion is an important driver of our results; indeed, inequality-averse subjects accept low offers more often in cases of loss-avoiding breaches than gain-seeking breaches. These results give us insight into the preferences and expectations of ordinary people in a case of a breach.
Item Type: | Journal Article | ||||||||||||||||||||
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URN: | urn:nbn:de:hbz:38-221115 | ||||||||||||||||||||
DOI: | 10.1111/jels.12154 | ||||||||||||||||||||
Journal or Publication Title: | J. Empir Leg. Stud | ||||||||||||||||||||
Volume: | 14 | ||||||||||||||||||||
Number: | 3 | ||||||||||||||||||||
Page Range: | S. 527 - 548 | ||||||||||||||||||||
Date: | 2017 | ||||||||||||||||||||
Publisher: | WILEY | ||||||||||||||||||||
Place of Publication: | HOBOKEN | ||||||||||||||||||||
ISSN: | 1740-1461 | ||||||||||||||||||||
Language: | English | ||||||||||||||||||||
Faculty: | Unspecified | ||||||||||||||||||||
Divisions: | Unspecified | ||||||||||||||||||||
Subjects: | no entry | ||||||||||||||||||||
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Refereed: | Yes | ||||||||||||||||||||
URI: | http://kups.ub.uni-koeln.de/id/eprint/22111 |
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