Optimal contracts with contingent allocation

C-Tier
Journal: Economics Letters
Year: 2020
Volume: 192
Issue: C

Authors (3)

Chillemi, Ottorino (not in RePEc) Galavotti, Stefano (Università degli Studi di Bari...) Gui, Benedetto (not in RePEc)

Score contribution per author:

0.335 = (α=2.01 / 3 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study the contractual design problem of a seller that observes an ex-post signal correlated with the buyer’s valuation and can make the allocation, but not payments, contingent on it. We show that, to maximize her profit, the seller should offer a menu of contracts whereby the good is transferred to the buyer only if the signal is sufficiently low. The welfare implications of these contracts are also discussed.

Technical Details

RePEc Handle
repec:eee:ecolet:v:192:y:2020:i:c:s016517652030149x
Journal Field
General
Author Count
3
Added to Database
2026-01-25