How does opportunistic behavior affect a contract?
Opportunism creates a possibility that a party can gain by disregarding or breaking the rules in a contract. It allows a party to profit from actions it knows the contract might not allow, hoping the other party will drop the dispute or pay up. If people never behave opportunistically, a trader's word is as good as his bond. People can concentrate on maximizing the value their transaction creates and bargaining to mutually beneficial outcomes where the contract is incomplete or unclear.
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A virtuous cycle refers to the development of new products that follows when a monopoly earns economic profits
Indicate whether the statement is true or false
Which of the following is not potentially a barrier to entry into a product market?
a. patent protection on the design of the product b. the absence of economies of scale in the product market c. government licensing of the product's producers d. the control of a crucial input necessary to produce the product