Mitu Gulati

The Price of Cheeky Contracting

Co-author(s)
Colla, Paolo
PUBLISHER
Law and Contemporary Problems
DATE
2021
 

Abstract

An implication of the incompleteness of contracts is that there are going to be gaps and ambiguities that either side can exploit. We ask whether the expectation that a counterparty is likely to act aggressively in its use of contract language impacts the price that market participants attach to that contract. To do our analysis, we look at how markets price contract terms for the perennial “bad boy” of the sovereign debt markets, the Republic of Argentina. The results are consistent with a market penalty for cheeky contracting.

Citation

Paolo Colla & G. Mitu Gulati, The Price of Cheeky Contracting, Law and Contemporary Problems (2021).
 

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