Contractual Intermediaries

Posted: 30 Jul 2002

See all articles by Joel Watson

Joel Watson

University of California, San Diego (UCSD) - Department of Economics

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics

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Abstract

This paper analyzes the role of third party intermediaries in contract enforcement. In our model, intermediaries record information about past actions and resolve disputes when requested to do so by the contracting agents. When the verifiability of information is limited, successful enforcement requires that dispute resolution costs be sufficiently great. Optimal enforcement systems economize on dispute resolution and information costs, and may involve establishment of specific systems tailored to particular groups.

Suggested Citation

Watson, Joel and Ramey, Garey, Contractual Intermediaries. The Journal of Law, Economics, and Organization, Vol. 18, No. 2, pp. 362-384, 2002, Available at SSRN: https://ssrn.com/abstract=311388

Joel Watson (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

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Garey Ramey

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-5721 (Phone)
858-534-7040 (Fax)

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