On the welfare effects of allowing unlimited renegotiation in agency relationships (Q946358)

The paper deals with a specific type of group decision-making and management. It refuses the traditional presumption due to which a once-accepted bilateral decision (i.e. contract) cannot be effectively negotiated again. The principle of renegotiation and its analysis is the main focus of interest in the referred paper. After an analysis of the quality and accessibility of information influencing the positions of negotiating partners, the main results regard the conditions under which the unlimited number of renegotiations appears to be more effective than their limiting by a finite and fixed number of steps.