Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Law
Gaining Assurances, Julia Y. Lee
Gaining Assurances, Julia Y. Lee
Journal Articles
This Article explores alternative legal mechanisms for solving a type of coordination problem known as the Assurance Game. The traditional approach has been to focus on changing the expectations of the parties. This Article focuses on altering the underlying payoff structure — not through sanctions, but through risk-reducing mechanisms such as guarantees.
One type of risk-reducing mechanism is the conditional money-back guarantee. Conditional money-back guarantees operate in settings ranging from federal deposit insurance to daily deal websites such as Groupon and LivingSocial. In each of these, a promise is made to return an individual’s monetary contribution if an event or …