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Full-Text Articles in Economics
Leases As Forms, David A. Hoffman, Anton Strezhnev
Leases As Forms, David A. Hoffman, Anton Strezhnev
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We offer the first large scale descriptive study of residential leases, based on a dataset of ~170,000 residential leases filed in support of over ~200,000 Philadelphia eviction proceedings from 2005 through 2019. These leases are highly likely to contain unenforceable terms, and their pro-landlord tilt has increased sharply over time. Matching leases with individual tenant characteristics, we show that unlawful terms are surprisingly likely to be associated with more expensive leaseholds in richer, whiter parts of the city. This result is linked to landlords' growing adoption of shared forms, originally created by non-profit landlord associations, and more recently available online …
The Common Sense Of Contract Formation, Tess Wilkinson-Ryan, David A. Hoffman
The Common Sense Of Contract Formation, Tess Wilkinson-Ryan, David A. Hoffman
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What parties know and think they know about contract law affects their obligations under the law and their intuitive obligations toward one another. Drawing on a series of new experimental questionnaire studies, this Article makes two contributions.First, it lays out what information and beliefs ordinary individuals have about how to form contracts with one another. We find that the colloquial understanding of contract law is almost entirely focused on formalization rather than actual assent, though the modern doctrine of contract formation takes the opposite stance. The second Part of the Article tries to get at whether this misunderstanding matters. Is …
Demand For Breach, Tess Wilkinson-Ryan
Demand For Breach, Tess Wilkinson-Ryan
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These studies elicit behavioral evidence for how people weigh monetary and non-monetary incentives in efficient breach. Study 1 is an experimental game designed to capture the salient features of the efficient breach decision. Subjects in a behavioral lab were offered different amounts of money to break the deal they had made with a partner. 18.6% of participants indicated willingness to break a deal for any amount of profit, 27.9% were unwilling to breach for the highest payout, and the remaining subjects identified a break-point in between. Study 2 is an online questionnaire asking subjects to take the perspectives of buyers …
The Psychology Of Contract Precautions, David A. Hoffman, Tess Wilkinson-Ryan
The Psychology Of Contract Precautions, David A. Hoffman, Tess Wilkinson-Ryan
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This research tests the intuition that parties to a contract approach each other differently before the contract is formed than they do once it is finalized. We argue that one of the most important determinants of self-protective behavior is whether the promisee considers herself to be in negotiations or already in an ongoing contract relationship. That shift affects precaution-taking even when it has no practical bearing on the costs and benefits of self-protection: the moment of contracting is a reference point that frames the costs and benefits of taking precautions. We present the results of three questionnaire studies in which …
United States Sovereign Debt: A Thought Experiment On Default And Restructuring, Charles W. Mooney Jr.
United States Sovereign Debt: A Thought Experiment On Default And Restructuring, Charles W. Mooney Jr.
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This chapter adopts the working assumption that it is conceivable that at some time in the future it would be in the interest of the United States to restructure its sovereign debt (i.e., to reduce the principal amount). It addresses in particular U.S. Treasury Securities. The chapter first provides an overview of the intermediated, tiered holding system for book-entry Treasuries. For the first time the chapter then explores whether and how—logistically and legally—such a restructuring could be effected. It posits the sort of dire scenario that might make such a restructuring advantageous. It then outlines a novel scheme …
Do Liquidated Damages Encourage Breach? A Psychological Experiment, Tess Wilkinson-Ryan
Do Liquidated Damages Encourage Breach? A Psychological Experiment, Tess Wilkinson-Ryan
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This Article offers experimental evidence that parties are more willing to exploit efficient-breach opportunities when the contract in question includes a liquidated-damages clause. Economists claim that the theory of efficient breach allows us to predict when parties will choose to breach a contract if the legal remedy for breach is expectation damages. However, the economic assumption of rational wealth-maximizing actors fails to capture important, shared, nonmonetary values and incentives that shape behavior in predictable ways. When interpersonal obligations are informal or underspecified, people act in accordance with shared community norms, like the moral norm of keeping promises. However, when sanctions …
Breach Is For Suckers, Tess Wilkinson-Ryan, David A. Hoffman
Breach Is For Suckers, Tess Wilkinson-Ryan, David A. Hoffman
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This paper presents results from three experiments offering evidence that parties see breach of contract as a form of exploitation, making disappointed promisees into “suckers.” In psychology, being a sucker turns on a three-part definition: betrayal, inequity, and intention. We used web-based questionnaires to test the effect of each of the three factors separately. Our results support the hypothesis that when breach of contract cues an exploitation schema, people become angry, offended, and inclined to retaliate even when retaliation is costly. This theory offers a useful advance insofar it explains why victims of breach demand more than similarly situated tort …
The Microfoundations Of Standard Form Contracts: Price Discrimination Vs. Behavioral Bias, Jonathan Klick
The Microfoundations Of Standard Form Contracts: Price Discrimination Vs. Behavioral Bias, Jonathan Klick
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Standard form contracts, or contracts of adhesion, appear to provide contradictory evidence for the operation of bargaining in the markets where they are common. Non-negotiated contract terms that seemingly benefit sellers to the detriment of buyers call into question the efficiency implications of the Coase Theorem, which forms the foundation of positive law and economics. Proponents of the behavioral school of law and economics have suggested that behavioral biases, observed in experimental contexts, provide the most plausible explanation for standard form contracts. However, price discrimination might provide a more parsimonious explanation for abusive terms in contracts. If there is heterogeneity …
A Contractual Approach To Data Privacy, Stephanos Bibas
A Contractual Approach To Data Privacy, Stephanos Bibas
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No abstract provided.
The "Nexus Of Contracts" Corporation: A Critical Appraisal, William W. Bratton
The "Nexus Of Contracts" Corporation: A Critical Appraisal, William W. Bratton
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No abstract provided.