Breach Remedies, Performance Excuses, and Investment Incentives

Urs Schweizer

The Journal of Law, Economics, and Organization, 2012, vol. 28, issue 4, 717-733

Abstract: The present article investigates investment decisions generated by legal regimes that combine different breach remedies and performance excuses from contract law in a setting where investments are hidden actions and both costs and benefits from performance are of stochastic nature. The stochastically richer setting and the combination of remedies turns out to alter qualitatively some of the findings from the previous law and economics literature. Moreover, the analytical method propagated might also prove useful for applications beyond the topic of the present article. The Author 2010. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.

Date: 2012
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