We establish that if the elasticity of substitution between effort and the other input is sufficiently small, the restrictive contract will result in higher total surplus than the basic contract.
Furthermore, the buyer's optimal contract menu always results in higher profits under the restrictive contract than the basic contract, even though she always chooses an input mix which is sub-optimal from a pure production standpoint.
Since q and k were chosen arbitrarily, this argument applies in particular to (tilde {q}(theta ^{ell })), the output assigned to ℓ in the optimal basic contract.
In the end, 623 undrafted free agents were signed in 2012 to the same basic contract that arrived at the Schillers' home that evening.
That is, under this constructed restrictive contract, the outputs that were produced under the original basic contract are once again produced using the (neoclassical) input mix that was endogenously selected under the original basic contract.
In basic contract talks, Mr. Bloomberg is for the most part locked in a testy stalemate.
The preceding remarks are summarized in Proposition 2. The buyer's profits under the optimal restrictive contract strictly exceed her profits under the optimal basic contract.
This survey of doctrinal innovation in contract law is perhaps unflattering to the common law tradition indigenous, judge-made law; the new ideas are largely plagiarized from the civil law, and it is to the rise of the treatise that we must attribute the change in the character and structure of basic contract law, rather than to judicial originality.
We compare output and input levels, farmer compensation, buyer profits and total surplus under a contract which specifies that the buyer controls the input ("restrictive contract") with one in which the farmer controls it ("basic contract").
The Daily Telegraph and Daily Mail claimed on Monday morning that, in addition to his basic contract, Flintoff would receive around £1 for each extra ticket sold for matches in which he plays – beginning, if all goes to plan, against Yorkshire at Old Trafford on Friday night.
