Contracting for Innovation FINAL
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Class notes
2014-09-24 notes
Attachments
2014-09-24 notes.pdf
Parents
Class notes
Children
Assymetric Information
Cost of Switching Suppliers
default penalty + problem goes to CEO
Governance Mechanism Is Difficult to Set up against Opportunistic Behavior
I Take Risk because Others Will Be Pay
John Deer Governance System
moral hazard
Switching Costs Produce Trust
THEN TO COURTS
There Are Information Costs
There Are Reputational Costs
We Do not Want Courts in Innovation
We Usually Required External Enforceability