Limited commitment Clausole campione

Limited commitment. So far we have supposed that G and F fully commit to the contract for its whole duration. We have shown that any stopping time T is optimal, in that case. We now turn to explore a framework in which commitment is limited and the contract between G and F may end earlier than originally agreed upon. Two scenarios are possible. First, F induces G to come back to the contracting table, despite that this is not the latter's will. According to the terminology adopted in previous works, this is the case of limited enforcement. Second, G breaks the initial agreement during the contract execution, despite that this may disadvantage F. This is the case of non−commitment. We hereafter describe these scenarios. In either case, we specify the consequences for the execution of the contract between F and the creditor. 9 This occurs because the second-best output is monotonic with respect to types qsb > qsb .