Laffont, Jean-Jacques and Tirole, Jean (1990) Adverse selection and renegotiation in procurement. Review of Economic Studies, 57 (4). pp. 597-625. ISSN 0034-6527. https://resolver.caltech.edu/CaltechAUTHORS:20171109-151956951
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Abstract
As was shown by Dewatripont, optimal long-term contracts under asymmetric information are generally not time-consistent. This paper fully characterizes the equilibrium of a two-period procurement model with commitment and renegotiation. It also analyzes whether renegotiated long-term contracts yield outcomes resembling those under either unrenegotiated long-term contracts or a sequence of short-term contracts, and links the analysis with the multiple unit durable good monopoly problem.
| Item Type: | Article | |||||||||
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| Additional Information: | © 1990 The Review of Economic Studies Ltd. First version received March 1988; final version accepted February 1990 (eds.). Formerly SSWP 665. | |||||||||
| Subject Keywords: | Cost efficiency, Capital costs, Adverse selection, Two period model, Contract incentives, Social costs, Production costs, Economic theory, Price discrimination, Economic rent | |||||||||
| Issue or Number: | 4 | |||||||||
| Record Number: | CaltechAUTHORS:20171109-151956951 | |||||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20171109-151956951 | |||||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | |||||||||
| ID Code: | 83119 | |||||||||
| Collection: | CaltechAUTHORS | |||||||||
| Deposited By: | Jacquelyn Bussone | |||||||||
| Deposited On: | 16 Nov 2017 22:53 | |||||||||
| Last Modified: | 03 Oct 2019 19:02 |
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