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Author: R. Glenn Hubbard Publisher: ISBN: Category : Contracts Languages : en Pages : 50
Book Description
It is well recognized by economists that long-term contracting under an array of price and non-price provisions may be an efficient response to small-numbers bargaining problems. Empirical work to distinguish such issues from predictions of models of market power and bargaining has been sparse, principally because the necessary data on individual transactions are seldom publicly available. The U.S. natural gas industry is well suited for such tests both because of the small number of buyers (pipelines) and sellers (producers) in each market and the large capital commitments required of transacting parties at the inning of the contract. We present a model of the bilateral bargaining process is natural gas field markets under uncertainty. We identify the 'initial price' as the outcome of the bargaining aver a fixed payment for pipeline to producer, and describe "price-escalator provisions" as a means of making the contract responsive at the margin to changes in the valuation of gas over the term of the agreement. Our econometric work rakes use of a large, detailed data set on during the l950s. Empirical evidence from models of price determination and the use of most-favored-nation clauses is supportive of the theoretical model.
Author: R. Glenn Hubbard Publisher: ISBN: Category : Contracts Languages : en Pages : 50
Book Description
It is well recognized by economists that long-term contracting under an array of price and non-price provisions may be an efficient response to small-numbers bargaining problems. Empirical work to distinguish such issues from predictions of models of market power and bargaining has been sparse, principally because the necessary data on individual transactions are seldom publicly available. The U.S. natural gas industry is well suited for such tests both because of the small number of buyers (pipelines) and sellers (producers) in each market and the large capital commitments required of transacting parties at the inning of the contract. We present a model of the bilateral bargaining process is natural gas field markets under uncertainty. We identify the 'initial price' as the outcome of the bargaining aver a fixed payment for pipeline to producer, and describe "price-escalator provisions" as a means of making the contract responsive at the margin to changes in the valuation of gas over the term of the agreement. Our econometric work rakes use of a large, detailed data set on during the l950s. Empirical evidence from models of price determination and the use of most-favored-nation clauses is supportive of the theoretical model.
Author: Jean-Michel Glachant Publisher: Edward Elgar Publishing ISBN: 184980480X Category : Business & Economics Languages : en Pages : 335
Book Description
This book fills a gap in the existing literature by dealing with several issues linked to long-term contracts and the efficiency of electricity markets. These include the impact of long-term contracts and vertical integration on effective competition, generation investment in risky markets, and the challenges for competition policy principles. On the one hand, long-term contracts may contribute to lasting generation capability by allowing for a more efficient allocation of risk. On the other hand, they can create conditions for imperfect competition and thus impair short-term efficiency. The contributors – prominent academics and policy experts with inter-disciplinary perspectives – develop fresh theoretical and practical insights on this important concern for current electricity markets. This highly accessible book will strongly appeal to both academic and professional audiences including scholars of industrial, organizational and public sector economics, and competition and antitrust law. It will also be of value to regulatory and antitrust authorities, governmental policymakers, and consultants in electricity law and economics.
Author: T.V.S.Ramamohan Rao Publisher: New Age International ISBN: 9788122415056 Category : Languages : en Pages : 370
Book Description
Contracts Are A Major Organizational Arrangement To Conduct Transactions. Economic Theory Has Been Making Attempts To Come To Grips With Four Pertinent Issues. Why Is Contracting Superior To Imperfect Markets And Hierarchical Control In Decentralized Organizations? What Basic Institutional Mechanisms Should Be In Place To Ensure Efficiency Of Contracts? What Determines The Choice Of Contract Forms (In Particular, The Behavioral Responses Of Self-Interest Seeking To Reactions Of Others) And Contract Parameters?Can Contracts Provide A Better Alternative To Regulated Markets? Keeping Information Asymmetry And Asset Specificity As The Focal Points This Book Deals With The Following Mechanisms Of Exchange-Markets (Including Transfer Prices), Contingent Claims Contracts, Incomplete And Incentive Contracts, And Implicit Contracts.The Emphasis Is On The Efficient Structuring Of Such Contracts And The Choice Of Suitable Contract Parameters. One Chapter Is Also Devoted To Trust And Informal Dimensions Of Contracts Since It Is Recognized That Defining And Enforcing Formal Contracts Becomes Difficult As Information Asymmetry And Asset Specificity Reach Their Limits. The Level Of Algebraic Complexity In The Derivations Is Kept To A Minimum To Make The Book Accessible To A Wide Audience.
Author: Alan J. Meese Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
During antitrust's "inhospitality era," courts and expert agencies condemned any number of non-standard agreements as "unlawful per se" or nearly so. More recently, courts and agencies have repudiated or softened many such per se rules. In so doing courts and agencies have invoked the lessons of Transaction Cost Economics (TCE), which holds that most non-standard agreements are efforts to economize on the cost of relying upon the market to conduct economic activity. At the same time, courts and agencies continue to enforce other per se rules against conduct that TCE deems presumptively beneficial. Moreover, courts and agencies conduct rule of reason analysis in a manner that is unduly hostile to claims that a restraint is in fact an effort to reduce transaction costs and overcome market failure. Finally, current standards governing alleged monopolization are unduly biased against non-standard contracts that disadvantage a monopolist's rivals. Where antitrust doctrine is concerned, the transaction cost revolution is hardly complete. This article seeks an explanation for antitrust's original and continued hostility toward non-standard agreements. The article finds that explanation in price theory's model of perfect competition. Some have attributed the inhospitality tradition to price theory's "technological" conception of the firm and a resulting belief that efficiencies necessarily arose within individual firms. While descriptively accurate, this account does not explain why economists failed to recognize that agreements between firms could overcome market failure and thus generate non-technological efficiencies. The article finds the explanation in the inhospitality era's methodological habit of assuming that "perfect competition" and "market failure" could coexist, and that market failure could thwart the optimal allocation of resources that perfect competition would otherwise produce. This habit equated market failure with a failure of a perfectly competitive market to produce efficient outcomes. By eliminating market failure, then, the state could restore the optimal allocation of resources that perfect competition would otherwise produce. Thus, this methodological habit framed the problem to be solved in a way that blocked the recognition that non-standard contracts could overcome market failure, since such contracts themselves caused a departure from one or more of perfect competition's assumptions and also facilitated activities, like advertising, that were not necessary under the perfect competition model. To be sure, Professor Ronald Coase's "Problem of Social Cost" undermined the assumption that market failure and perfect competition can co-exist. Coase and other practitioners of TCE such as Oliver Williamson, also explained how non-standard contracts could make an imperfectly competitive economy more competitive by overcoming market failure. Nonetheless, the perfect competition model still haunts much antitrust thinking. Discussion of "the economics of antitrust" almost always begin with the perfect competition model, and departures from perfect competition are viewed as sources of market power that can only be justified by some offsetting efficiency. While non-standard contracts are often viewed as potentially beneficial, they are rarely characterized as methods of overcoming market failure but are instead characterized as methods of reducing costs, analogous to the realization of technological efficiencies. This oversight helps explain the lingering bias against such restraints.
Author: Richard Stomper Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper uses as its theoretical starting point the concept of the firm as a nexus of contracts. It examines the full range of contracts which go into forming this nexus: those formally negotiated, those adopted by custom or practice, and those imposed as legal defaults. The concept of bargaining power is developed as central to the negotiation of ethical contracts. Such contracts require relatively equal power from both parties. Three Supreme Court decisions, known as the Steelworker trilogy, decided by the Court in 1960 are examined for insights into the nature of relational and incomplete contracts, of which labor contracts are a primary example. Special emphasis is given to the use of arbitration to resolve disputes in labor contracts. Arbitration in labor disputes is compared to arbitration in the financial sector and the advantages of the former and procedural defects of the latter are discussed. It is concluded that the appropriate use of arbitration, with procedural safeguards for both parties, can replace a market with inequities in bargaining power with an efficient and more equitable market in dispute resolution where the bargaining power of both parties is comparable.
Author: Karen Makuch Publisher: John Wiley & Sons ISBN: 140517787X Category : Technology & Engineering Languages : en Pages : 691
Book Description
Despite bringing prosperity, industrialisation generally leads to increasing levels of pollution which has a detrimental impact on the environment. In response, legislation which seeks to control or prevent such impact has become common. Similarly, climate change and energy security have become major drivers for the regulatory regimes that have emerged in the energy field. Given the global or regional scope of many environmental problems, international cooperation is often necessary to ensure such legislation is effective. The EU and the UK have contributed to the development of the environmental and energy law regimes currently in force, spanning across international, transnational and national levels. At the same time, practical responses to environmental and energy problems have largely been the focus of engineers, scientists and other technical experts. Environmental & Energy Law attempts to bridge the knowledge gap between legal developments designed to achieve environmental and/or energy-related objectives and the practical, scientific and technical considerations applicable to the same environmental problems. In particular, it attempts to convey a broad range of topical issues in environmental and energy law, from climate and energy regulation, technology innovation and transfer, to pollution control, environmental governance and enforcement. In addition the book outlines key sector specific legal regimes (including water, waste and air quality management), focusing on issues or topics that are particularly relevant to both environmental and energy lawyers, and engineering, science and technology-oriented professionals and students. In this vein, the book guides the reader on some basic practical applications of the law within scientific, engineering and other practical settings. The book will be useful to all those working or studying in the environmental or energy arena, including law students, legal professionals, engineering and science students and professionals. By adopting a multi-disciplinary approach to environmental and energy law, the book embraces all readerships and helps to address the often thorny problem of communication between scientists, engineers, lawyers and policy-makers.
Author: S. Craig Pirrong Publisher: Springer Science & Business Media ISBN: 1461562597 Category : Business & Economics Languages : en Pages : 269
Book Description
Deterrence of market manipulation is central to the entire regulatory and legal framework governing the operation of American commodity futures markets. However, despite all of the regulatory, scholarly, and legal scrutiny of market manipulation, the subject is widely misunderstood. Federal commodity and securities laws prohibit manipulation, but do not define it. Scholarly research has failed to analyze adequately the causes or effects of manipulation, and the relevant judicial decisions are confused, confusing, and contradictory. The aim of this book is to illuminate the process of market manipulation by presenting a rigorous economic analysis of this phenomenon, including the conditions that facilitate it and its effects on market users and others. The conclusions of this analysis are used to examine critically some legal and regulatory anti-manipulation policies. The Economics, Law and Public Policy of Market Power Manipulation concludes with a set of robust and realistic tests that regulators and jurists can apply to detect and deter manipulation.
Author: Elena D'Agostino Publisher: Springer ISBN: 3319131141 Category : Law Languages : en Pages : 84
Book Description
This book examines the most controversial issues concerning the use of pre-drafted clauses in fine print, which are usually included in consumer contracts and presented to consumers on a take-it-or-leave-it basis. By applying a multi-disciplinary approach that combines consumer’s psychology and seller’s drafting power in the logic of efficiency and good faith, the book provides a fresh and unconventional analysis of the existing literature, both theoretical and empirical. Moving from the unconscionability doctrine, it criticizes (and in some cases refutes) its main conclusions based on criteria which are usually invoked to sustain the need for public intervention to protect consumers, and specifically related to Law (contract complexity), Psychology (consumer lack of sophistication criterion) and Economics (market structure criterion). It also analyzes the effects of different regulations, such as banning vexatious clauses or mandating disclosure clauses, showing that none of them protect consumers, but in fact prove to be harmful when consumers are more vulnerable, that is whenever sellers can exploit some degree of market power. In closing, the book combines these disparate aspects, arguing that the solution (if any) to the problem of consumer exploitation and market inefficiency associated with the use of contracts of adhesion in these contexts cannot be found in removing or prohibiting hidden clauses, but instead has to take into account the effects of these clauses on the contract as a whole.
Author: Ezra Friedman Publisher: ISBN: Category : Languages : en Pages : 44
Book Description
Conventional legal doctrine holds that courts should be more willing to find unconscionability in contracts when either one party has monopoly power or the other party was not given a choice of contract terms. This paper suggests that this doctrine is misguided on both points. I argue that the unconscionability doctrine should be used primarily to protect unsophisticated customers from exploitation, and show that when a seller has significant market power and offers one contract to all customers, fear of alienating sophisticated customers can discourage the seller from using inefficient contracts to exploit the unsophisticated. In contrast, in a more competitive industry, sellers may actually lose money on the sophisticated customers, and be willing to sacrifice sophisticated customers in order to more fully exploit the unsophisticated. Likewise, when a monopolist offers a choice of contracts, it is more attractive for it to exploit the unsophisticated while offering an efficient contract to the sophisticated. This paper presents a formal model showing that exploitation tends to increase with competition. Although competition leads to more inefficient exploitation, it also leads to lower prices, and the welfare effects on the unsophisticated are ambiguous.
Author: R. Glenn Hubbard
Author: R. Glenn Hubbard
Author: Jean-Michel Glachant
Author: T.V.S.Ramamohan Rao
Author: Vital Anderhub
Author: Alan J. Meese
Author: Richard Stomper
Author: Karen Makuch
Author: S. Craig Pirrong
Author: Elena D'Agostino
Author: Ezra Friedman