Path Dependence in Corporate Contracting: Increasing Returns, Herd Behavior and Cognitive Biases

Marcel Kahan; Michael Klausner

F. Hodge O'Neal Corporate and Securities Law Symposium

Path Dependence in Corporate Contracting: Increasing Returns, Herd Behavior and Cognitive Biases

Authors: Marcel Kahan (New York University) , Michael Klausner (New York University)

Abstract

Part I of this Article reviews our prior analysis of increasing returns in corporate contract terms. Within the rubric of increasing returns, we discuss learning and network externalities in corporate contracts. Parts II and III examine how agency costs and behavioral biases can lead to standardization.

Keywords: Corporations, Covenants

How to Cite: Kahan, M. & Klausner, M. (1996) “Path Dependence in Corporate Contracting: Increasing Returns, Herd Behavior and Cognitive Biases”, Washington University Law Review. 74(2).