Cognition and Incomplete Contracts

Jean Tirole

American Economic Review, 2009, vol. 99, issue 1, 265-94

Abstract: Thinking about contingencies, designing covenants, and seeing through their implications is costly. Parties to a contract accordingly use heuristics and leave it incomplete. The paper develops a model of limited cognition and examines its consequences for contractual design. (JEL D23, D82, D86, L22)

JEL-codes: D23 D82 D86 L22 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/aer.99.1.265
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Citations: View citations in EconPapers (115)

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