Arbeitspapier

Behaviorally efficient remedies: An experiment

Under common law, the standard remedy for breach of contract is expectation damages. Under continental law, the standard is specific performance. The common law solution is ex post efficient. But is it also ex ante efficient? We use experimental methods to test whether knowing that non-fulfilment will only lead to damages deters mutually beneficial trade. The design excludes aversion against others willfully breaking their promises. We find that there is indeed less trade if specific performance is not guaranteed, provided the preference for the traded commodity is sufficiently pronounced.

Sprache
Englisch

Erschienen in
Series: Preprints of the Max Planck Institute for Research on Collective Goods ; No. 2017/17

Klassifikation
Wirtschaft
Design of Experiments: Laboratory, Individual
Institutions: Design, Formation, Operations, and Impact
Allocative Efficiency; Cost-Benefit Analysis
Externalities
Altruism; Philanthropy; Intergenerational Transfers
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Contract Law
Thema
remedies
breach of contract
specific performance
expectation damages
reliance damages
donation
experiment

Ereignis
Geistige Schöpfung
(wer)
Engel, Christoph
Freund, Lars
Ereignis
Veröffentlichung
(wer)
Max Planck Institute for Research on Collective Goods
(wo)
Bonn
(wann)
2017

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Engel, Christoph
  • Freund, Lars
  • Max Planck Institute for Research on Collective Goods

Entstanden

  • 2017

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