CRC/TRR 190/3: Optimal dynamic contracting, enforcement and ambiguity (SP B02)

Many economic transactions lead to long-term contractual relationships, like franchise agreements, research and development contracts, license contracts, and labor contracts. Following the plan that the project set for itself at the CRC’s beginning, the team applies the novel tools and methods that it developed in earlier funding periods to investigate two key features of long-term relationships: enforceability and ambiguity. The main approach is to take the classical perspective as a benchmark and to include behavioral aspects, such as subjective concerns about trustworthiness. The analyses are theoretical in nature, including mechanism design and decision-theoretic work on financial markets.