Incomplete Contracts and Signaling

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Incomplete Contracts and Signaling

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Title: Incomplete Contracts and Signaling
Author: Spier, Kathryn E.
Citation: Kathryn E. Spier, Incomplete Contracts and Signaling, 23(3) RAND J. Econ. 432 (1992).
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Abstract: This article Presents a principal-agent model in which asymmetric information leads to contractual incompleteness. I show that in the presence of transactions costs, incompleteness may act as a signal of the principal's type. Two types of transactions costs are considered: those incurred ex ante (drafting costs) and those incurred ex post (enforcement or verification costs). I prove that in the presence of either of these costs, asymmetric information leads to more contractual incompleteness than full information does.
Published Version: doi:10.2307/2555872
Other Sources: http://www.law.harvard.edu/faculty/spier/pdf/incompletecontractssignalingrand.pdf
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:10611780
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