0000000000014224
AUTHOR
Daniel Göller
showing 5 related works from this author
Contract, Renegotiation, and Holdup: When Should Messages be Sent?
2015
I consider a setting of complete but unverifiable information in which two agents enter a contractual relationship to induce mutually beneficial investments. As my main result, I establish that the famous irrelevance of contracting paradigm, that arises due to the detrimental effect of renegotiation, is resolved if there is a fixed point in time when actions have to be chosen and one accounts for the fact that renegotiation takes time. What drives my optimality result is that, by stipulating when the mechanism is to be played, the agents ensure that renegotiation is possible ex ante but not ex post.
Mobile telephony in emerging markets: The importance of dual-SIM phones
2020
Abstract A substantial share of customers in emerging markets use dual-SIM phones and subscribe to two mobile networks. A primary motive for so called multi-simming is to take advantage of cheap on-net services from both networks. In our modelling effort, we augment the seminal model of competing telephone networks á la Laffont, Rey and Tirole (1998b) by a segment of flexible price hunters that may choose to multi-sim. According to our findings, in equilibrium, the networks set a high off-net price in the linear tariffs to achieve segmentation. This induces the price hunters to multi-sim. We show that increased deployment of dual-SIM phones may induce a mixing equilibrium with high expected…
Breakdown in Multilateral Negotiations
2015
Abstract We analyze a complete information multilateral bargaining model in which a buyer is to purchase two complementary goods from two sellers. Binding cash-offer contracts are used to govern transactions. In contrast to preexisting literature, we do not normalize the parties' reservation utilities to zero. We show that this assumption holds critical importance by demonstrating that a complete breakdown of negotiations may occur as the unique equilibrium outcome, even if only two sellers are present.
Expectation Damages and Bilateral Cooperative Investments
2012
We examine the efficiency of the standard breach remedy expectation damages in a setting where the buyer invests cooperatively and the seller invests both cooperatively and selfishly. Contracts may specify a required quality level and an upper bound to the seller's coordination costs. We find that it is optimal to write an augmented Cadillac contract in which quality is stipulated such that it cannot be met with positive probability together with a very low price. Thus, the seller becomes a residual claimant and the coordination-cost threshold can be used to balance the incentives of the buyer.
How Long-Term Contracts can Mitigate Inefficient Renegotiation Arising Due to Loss Aversion
2021
A loss-averse buyer and seller face an uncertain environment. Should they write a long-term contract or wait until the state of the world is realized? I show that simple long-term contracts perform better than insinuated in Herweg and Schmidt (2015), even though loss aversion makes renegotiation sometimes inefficient. During renegotiation, the outcome induced by the long-term contract constitutes the reference point to which the parties compare gains and losses induced by the renegotiated transaction. Whereas Herweg and Schmidt consider that the long-term contract is always performed, it should not in "bad" states. This alters the threat point in renegotiation, making it easier to renegotia…