Free contract

About: Free contract is a(n) research topic. Over the lifetime, 18 publication(s) have been published within this topic receiving 248 citation(s).

Game analysis of abuse-free contract signing

Abstract: In this paper we report on the verification of two contract signing protocols. Our verification method is based on the idea of modeling those protocols as games, and reasoning about their properties as strategies for players. We use the formal model of alternating transition systems to represent the protocols and alternating-time temporal logic to specify properties. The paper focuses on the verification of abuse-freeness, relates this property to the balance property, previously studied using two other formalisms, shows some ambiguities in the definition of abuse-freeness and proposes a new, stronger definition. Formal methods are not only useful here to verify automatically the protocols but also to better understand their requirements (balance and abuse-freeness are quite complicated and subtle properties).

Analysis of Abuse-Free Contract Signing

Abstract: Optimistic contract signing protocols may involve subprotocols that allow a contract to be signed normally or aborted or resolved by a third party. Since there are many ways these subprotocols might interact, protocol analysis involves consideration of a number of complicated cases. With the help of Murk?, a finite-state verification tool, we analyze the abuse-free optimistic contract signing protocol of Garay, Jakobsson, and MacKenzie. In addition to verifying a nmnber of subtle properties, we discover an attack in which negligence or corruption of the trusted third party may allow abuse or unfairness. Contrary to the intent of the protocol, the cheated party is not able to hold the third party accountable. In addition to analyzing a modification to the protocol that avoids these problems, we discuss issues involved in the application of finite-state analysis to fair exchange protocols, in particular models of fairness guarantees, abuse, and corrupt protocol participants.

Coercion, Contract and the Limits of the Market

Abstract: It is a widely accepted principle of economics that if two or more adults voluntarily agree to a contract or an exchange that has no negative fall-out on others, then the government should not stop such a contract. This is often called the ‘principle of free contract’ (PFC). There is a body of writing in economics which upholds the PFC. Yet this ubiquitous principle is ill-defined and full of ambiguities. For instance, since it refers to voluntary choice, its proper use presumes an understanding of what is ‘voluntary’ and, therefore, also, of what is coercive. What is ironic is that, while philosophers and legal scholars have debated and analyzed these concepts and the validity of the principle of free contract, there is very little discussion of these in economics, even though so much of economics is founded on this principle. This has caused a lot of policy confusion. The aim of this paper is to construct general rules for when we may violate the PFC. The argument is constructed within the Paretian framework. Hence, the violation of the PFC is not justified by appeal to deontological ethics or non-welfarist criteria. This is not an easy task since the principle of free contract is often viewed as a rule that is a derivative of the Pareto principle.

The Ethics of Incentivizing the Uninformed: A Vignette Study

Abstract: Our recent working paper (Ambuehl, Ockenfels, and Stewart 2017) shows theoretically and experimentally that people with higher costs of information processing respond more to an increase in the incentive for a complex transaction, and decide to participate based on a worse understanding of its consequences. Here, we address the resulting tradeoff between the principle of informed consent and the principle of free contract. Respondents to our vignette study on oocyte donation overwhelmingly favor the former and support policies that require donors to thoroughly understand the transaction. This finding helps design markets that are not only efficient but also considered ethical.

Coercion, Contract and the Limits of the Market

Abstract: It is widely accepted of economics that if two or more adults voluntarily agree to a contract or an exchange that has no negative fall-out on others, then the government should not stop such a contract. This is often called the "principle of free contract" (PFC). There is a body of writing in economics which upholds the PFC. Yet, this ubiquitous principle is ill-defined and full of ambiguities. For instance, since it refers to voluntary choice, its proper use presumes an understanding of what is "voluntary" and, therefore, also, of what is coercive. What is ironic is that, while philosophers and legal scholars have debated and analyzed these concepts and the validity of the principle of free contract, there is very little discussion of these in economics, even though so much of economics is founded on this principle. This has caused a lot of policy confusion. The aim of this paper is to construct within the Paretian framework. Hence, the violation of the PFC is not justified by appeal to deontological ethics and non-welfarist criteria. This is not an easy task since the principle of free contract is often viewed as a rule that is a derivative of the Pareto principle.