Behaviorally efficient remedies
An experiment
Bibliographic Data
| ID | 21451766 |
|---|---|
| Authors | Christoph Engel (0000-0001-8451-3599), Lars Freund (Max Planck Institute for Behavioral Economics) |
| Year | 2026 |
| Volume | 85 |
| Pages | 106321 |
| Publication date | 2026-03-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | International Review of Law and Economics (JOURNAL) |
| Journal identifiers | ISSN: 0144-8188 • E-ISSN: 1873-6394 |
| Publisher | Elsevier BV (PUBLISHER) |
| DOI | 10.1016/j.irle.2026.106321 |
| OpenAlex | W3202078880 |
| Language | EN |
| References cited | 22 |
Under common law, the standard remedy for breach of contract is expectation damages. Under continental law, the standard is specific performance. The common law solution is ex post efficient. But is it also ex ante efficient? We use experimental methods to test whether knowing that non-fulfilment will only give a right to damages deters mutually beneficial trade. The design excludes aversion against others willfully breaking their promises, and fairness concerns. We find that there is indeed less trade if specific performance is not guaranteed, provided the preference for the traded commodity is sufficiently pronounced
Business · Commodity · Damages · Economics · Ex-ante · Macroeconomics · Market economy · Microeconomics · Political science · Preference · Law · Law, Economics, and Judicial Systems · Legal and Constitutional Studies · Legal principles and applications
The Questionable Efficiency of the Efficient-Breach Doctrine
Measuring utility by a single-response sequential method
Beyond Revealed Preference
The Willingness to Pay–Willingness to Accept Gap, the “Endowment Effect,” Subject Misconceptions, and Experimental Procedures for Eliciting Valuations
A Domain-Specific Risk-Taking (Dospert) scale for adult populations
Social Value Orientation
Risk Aversion and Incentive Effects
Z-Tree
Majoritarian vs. Minoritarian Defaults
Experimental Tests of the Endowment Effect and the Coase Theorem
| Highly cited | No |
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