Incomplete Contracts and Competition - Another Look at Fisher Body/General Motors?

Posted: 29 Apr 2010 Last revised: 7 Feb 2013

Antonio Nicita

University of Siena - Department of Economics

Simone M. Sepe

University of Arizona - James E. Rogers College of Law; IAST - Fondation Jean-Jacques Laffont - TSE ; University of Toulouse 1 - Industrial Economic Institute (IDEI)

Date Written: 2010

Abstract

In this paper we analyze the problem of the enforcement of incomplete contracts with endogenous outside options. Some of the equilibria we outline may reverse one of the main results presented in the standard literature. We then revisit the literature on the highly debated Fisher Body/General Motors merger and suggest an explanation based on GM’s need to control the Fisher brothers’ outside options.

Keywords: incomplete contracts, competition, FIsher Body/General Motors

JEL Classification: D23, L12, L14, L21, L22, L42

Suggested Citation

Nicita, Antonio and Sepe, Simone M., Incomplete Contracts and Competition - Another Look at Fisher Body/General Motors? (2010). 34 Eur. J. L. & Econ. 495 (2012). Available at SSRN: https://ssrn.com/abstract=1597325

Antonio Nicita (Contact Author)

University of Siena - Department of Economics ( email )

Piazza S. Francesco, 7
Siena, I-53100
Italy

Simone M. Sepe

University of Arizona - James E. Rogers College of Law ( email )

P.O. Box 210176
Tucson, AZ 85721-0176
United States

IAST - Fondation Jean-Jacques Laffont - TSE ( email )

21 allée de Brienne
31015 Toulouse Cedex 6
Toulouse Cedex, F-31042
France

University of Toulouse 1 - Industrial Economic Institute (IDEI) ( email )

Manufacture des Tabacs
21 Allee de Brienne bat. F
Toulouse Cedex, F-31000
France

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