•   •   •

Agreeing Now to Agree Later: Contracts That Rule Out But Do Not Rule In Oliver Hart John Moore Download the Paper (PDF format) - March 29, 2004 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing. ABSTRACT: We view a contract as a list of outcomes. Ex ante, the parties commit not to consider outcomes not on the list, i.e., these are "ruled out". Ex post, they freely bargain over outcomes on the list, i.e., the contract specifies no mechanism to structure their choice; in this sense outcomes on the list are not "ruled in". A "loose" contract (long list) maximizes flexibility but may interfere with ex ante investment incentives. When these incentives are important enough, the parties may write a "tight" contract (short list), even though this leads to ex post inefficiency. SUGGESTED CITATION: Oliver Hart and John Moore, "Agreeing Now to Agree Later: Contracts That Rule Out But Do Not Rule In" (March 29, 2004). Harvard Law School. Harvard Law School John M. Olin Center for Law, Economics and Business Discussion Paper Series. Paper 465. http://lsr.nellco.org/harvard/olin/papers/465 | REPOSITORY HOME  | SEARCH  | MY ACCOUNT  | NELLCO HOME | Powered by bepress.