The Coase Theorem of Timing of Payment
5 Pages Posted: 11 Oct 2015 Last revised: 14 Oct 2015
Date Written: October 11, 2015
Abstract
This paper proves that timing of payment, whether a price is paid ex-ante or ex-post, makes no difference. The equivalence is valid, with or without litigation. However, litigation always gives buyers some advantage, while it inflicts loss to sellers. This paper recommends vendors not to shirk.
Keywords: Moral Hazard, Timing of Payment
JEL Classification: D74
Suggested Citation: Suggested Citation
Choi, Hak, The Coase Theorem of Timing of Payment (October 11, 2015). Available at SSRN: https://ssrn.com/abstract=2672448 or http://dx.doi.org/10.2139/ssrn.2672448
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