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Article: Majoritarian vs. minoritarian defaults.(response to article by Barry E. Alder in this issue, p. 1547)
- Article from:
- Stanford Law Review
- Article date:
- July 1, 1999
- Author:
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Copyright informationCOPYRIGHT 1999 Stanford Law School. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Recent theoretical analysis of contract default roles has devoted significant attention to the use of penalty default roles as a way to induce a contractor to reveal private information. Penalty default roles demonstrate how efficient roles cannot be derived by simply asking what most parties would have contracted for had they written a complete contract. Such "majoritarian" default roles derive from an implicit assumption about the reason why a particular contract is incomplete. A fuller efficiency analysis tries to understand the reasons why contracts are incomplete and how different default roles affect the efficiency of the contracting process and the contracts ...
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