{"product_id":"more-is-less-9781009396073","title":"More is Less","description":"\u003cp\u003e • Author(s): Maija Halonen-Akatwijuka | Oliver Hart\u003cbr\u003e • Publisher: Cambridge University Press\u003cbr\u003e • Publisher Imprint: Cambridge University Press\u003cbr\u003e • BISAC: Economics - General\u003c\/p\u003e\u003cp\u003eWhy are contracts incomplete? Transaction costs and bounded rationality cannot be a total explanation since states of the world are often describable, foreseeable, and yet are not mentioned in a contract. Asymmetric information theories also have limitations. We offer an explanation based on 'contracts as reference points'. Including a contingency of the form, 'The buyer will require a good in event E', has a benefit and a cost. The benefit is that if E occurs there is less to argue about; the cost is that the additional reference point provided by the outcome in E can hinder (re)negotiation in states outside E. We show that if parties agree about a reasonable division of surplus, an incomplete contract is strictly superior to a contingent contract. If parties have different views about the division of surplus, an incomplete contract can be superior if including a contingency would lead to divergent reference points.\u003c\/p\u003e","brand":"Atlantic Books","offers":[{"title":"Paperback","offer_id":46416163307671,"sku":"9781009396073","price":2282.0,"currency_code":"INR","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0666\/3471\/1191\/files\/9781009396073.webp?v=1769062607","url":"https:\/\/atlanticbooks.com\/products\/more-is-less-9781009396073","provider":"Atlantic Books","version":"1.0","type":"link"}