Contracting Hazards (Adult Edition)

21 April 2009 at 7:18 am Lasse 10 comments

| Lasse Lien |

If you need a rich example of the hazards of contracting, this one is particularly pregnant. Make sure you read it through to the end. Best suited for mature audiences.

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10 Comments Add your own

1. Bart | 21 April 2009 at 9:10 am

Gives some extra meaning to the word “guile”
2. REW | 21 April 2009 at 9:52 am

and “adverse selection”
3. dgerard | 21 April 2009 at 6:46 pm

Is that considered horizontal or vertical integration?
4. Peter Klein | 21 April 2009 at 9:29 pm

My friend Deb Walker wrote a dissertation back in the 1980s on the mattress industry. How do you think she liked being known as the “mattress gal”?
5. Marcin | 22 April 2009 at 2:27 am

And this shows why written agreements, and – yes! – even lawyers are really worth the money.
6. Lasse | 22 April 2009 at 4:07 am

Can asset specificity be read into the example? If so, I think I can give an entire organizational economics course around the story.
7. Bart | 22 April 2009 at 8:38 am

Lasse,

the article does mention that the neighbour looked like the husband, which would be the reason for enaging a contractual relation with him specifically. In this case I would say that the much-encountered factor of geographic distance plays a minor (though not inconvenient) role.
You gunna give this course or what?
8. Lasse | 23 April 2009 at 2:23 am

Good point Bart.
Actually I’ve decided to de velop an entire degree around it. All I need is a good name for the degree. Got any suggestions? Master of ………..
9. Bart | 23 April 2009 at 4:53 am

… Neighbourly Conduct
10. REW | 23 April 2009 at 10:25 am

… Adverse Seduction?

… Human Capital Contracting?