Universität zu Köln

Schmitz, Patrick W. ORCID: 0000-0003-3461-5102 (2022). How (Not) to Purchase Novel Goods and Services: Specific Performance Versus at-will Contracts. Econ. J., 132 (647). S. 2563 - 2578. OXFORD: OXFORD UNIV PRESS. ISSN 1468-0297

Full text not available from this repository.

Abstract

A buyer wants to purchase an innovative good from a seller. Both parties are risk-neutral, and payments from the buyer to the seller must be non-negative. After the contract is signed, the seller privately observes a signal which may be informative about the seller's costs. We compare two contracting regimes. In the case of specific performance, the courts enforce the contractually specified trade level. In the case of at-will contracting, the seller is free to walk away from the contract after observing the signal. The optimal regime from an economic efficiency point-of-view depends on the informativeness of the signal.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Schmitz, Patrick W. UNSPECIFIED orcid.org/0000-0003-3461-5102 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-667735
DOI:	10.1093/ej/ueac024
Journal or Publication Title:	Econ. J.
Volume:	132
Number:	647
Page Range:	S. 2563 - 2578
Date:	2022
Publisher:	OXFORD UNIV PRESS
Place of Publication:	OXFORD
ISSN:	1468-0297
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language RELATIONSHIP-SPECIFIC INVESTMENT; HOLD-UP PROBLEM; LIMITED-LIABILITY; INCOMPLETE CONTRACTS; RENEGOTIATION DESIGN; INFORMATION; EFFICIENCY; MECHANISMS; PRINCIPAL; BREACH Multiple languages Economics Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/66773