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dc.contributor.authorChakravarty, Surajeeten_US
dc.contributor.authorMacLeod, W. Bentleyen_US
dc.date.accessioned2006-11-16en_US
dc.date.accessioned2010-07-07T09:50:37Z-
dc.date.available2010-07-07T09:50:37Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/33687-
dc.description.abstractMost contracts that individuals enter into are not written from scratch; rather, they depend upon forms and terms that have been successful in the past. In this paper, we study the structure of form construction contracts published by the American Institute of Architects (AIA). We show that these contracts are an efficient solution to the problem of procuring large, complex projects when unforeseen contingencies are inevitable. This is achieved by carefully structuring the ex post bargaining game between the Principal and the Agent. The optimal mechanism corresponding to the AIA construction form is consistent with decisions of the courts in several prominent but controversial cases, and hence it provides an economic foundation for a number of the common-law excuses from performance. Finally, the case of form contracts for construction is an example of how markets, as opposed to private negotiations, can be used to determine efficient contract terms.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesIZA Discussion Papers 2125en_US
dc.subject.jelD8en_US
dc.subject.jelK2en_US
dc.subject.jelL7en_US
dc.subject.ddc330en_US
dc.subject.keywordlaw and economicsen_US
dc.subject.keywordincomplete contractsen_US
dc.subject.keywordconstructionen_US
dc.subject.keywordagency theoryen_US
dc.subject.keywordindustry studiesen_US
dc.subject.keywordoutsourcingen_US
dc.subject.keywordprocurementen_US
dc.titleConstruction contracts (or: how to get the right building at the right price?)en_US
dc.typeWorking Paperen_US
dc.identifier.ppn512343411en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
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