Indescribability and asymmetric information at the contracting stage

Maskin and Tirole [Maskin, E., Tirole, J., 1999. Unforeseen contingencies and incomplete contracts. Review of Economic Studies, 66, 83–114] show that indescribability does not matter for contractual incompleteness when there is symmetric information both at the contracting stage and at the trading s...

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Veröffentlicht in:Economics letters 2008-05, Vol.99 (2), p.367-370
1. Verfasser: Kunimoto, Takashi
Format: Artikel
Sprache:eng
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Zusammenfassung:Maskin and Tirole [Maskin, E., Tirole, J., 1999. Unforeseen contingencies and incomplete contracts. Review of Economic Studies, 66, 83–114] show that indescribability does not matter for contractual incompleteness when there is symmetric information both at the contracting stage and at the trading stage. Following their setup, I show that with asymmetric information at both stages, indescribability can matter.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2007.08.007