Default rules and equilibrium selection of contract terms

Hviid, Morten (1996) Default rules and equilibrium selection of contract terms. International Review of Law and Economics, 16 (2). pp. 233-245.

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Abstract

The paper analyses the effect of default rules on the selection of contract terms given asymmetric information. It is shown that even when costs of contracting around the default are zero, the form of the default rule may matter because it may serve as a means for selection between multiple equilibria. The result is illustrated in a simple signalling game.

Item Type:	Article
Faculty \ School:	Faculty of Social Sciences > School of Law
Depositing User:	Julie Frith
Date Deposited:	16 Nov 2010 09:38
Last Modified:	15 Dec 2022 02:05
URI:	https://ueaeprints.uea.ac.uk/id/eprint/10806
DOI:	10.1016/0144-8188(95)00023-2

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