Incomplete contracting and contract renegotiation


In the real world renegotiation is the rule, not the exception. In this video Stephane Saussier explains why the terms of initial agreements often need to be modified and what the consequences are for the execution of the contract and for the efficiency of contracting in general.


Guasch, J. L., Laffont, J. J., & Straub, S. (2008). Renegotiation of concession contracts in Latin America. Evidence from the water and transport sectors. International Journal of Industrial Organization, 26(2), 421–442.

Estache, A., & Saussier, S. (2014). Public-Private Partnerships: A Short Assessment (CESifo DICE Report 3/2014).