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Full-Text Articles in Law
Contract Renegotiation And Options In Agency Problems, Aaron S. Edlin, Benjamin E. Hermalin
Contract Renegotiation And Options In Agency Problems, Aaron S. Edlin, Benjamin E. Hermalin
Aaron Edlin
This article discusses the ability of an agent and a principal to achieve the first-best outcome when the agent invests in an asset that has greater value if owned by the principal than by the agent. When contracts can be renegotiated, a well-known danger is that the principal can hold up the agent, undermining the agent's investment incentives. We begin by identifying a countervailing effect: Investment by the agent can increase his value for the asset, thus improving his bargaining position in renegotiation. We show that option contracts will achieve the first best whenever his threat-point effect dominates the holdup …
Government By Voucher, Malcolm Thorburn
The Right To Silence Helps The Innocent: A Game-Theoretic Analysis Of The Fifth Amendment Privilege, Alex Stein, Daniel Seidmann
The Right To Silence Helps The Innocent: A Game-Theoretic Analysis Of The Fifth Amendment Privilege, Alex Stein, Daniel Seidmann
Alex Stein
This Article develops a consequentialist game-theoretic perspective for understanding the right to silence. By applying this perspective, the Article reveals that the conventional perception of the right to silence, as impeding the search for truth and thus helping criminals alone, is mistaken. The Article demonstrates that the right to silence can help triers of fact to distinguish between factually innocent and guilty suspects and defendants. This is achieved by an important feature of the right to silence which this Article brings to the fore: a criminal's self-interested response to questioning can impose externalities (in the form of wrongful conviction) on …