LONG-TERM CONTRACTS AND RELATIONAL CONTRACTS
This chapter discusses the literature on long-term contracts and relational contracts. The central issues in the literature on long-term contracts are the effects of renegotiation and what these contracts can accomplish over and above a series of short-term contracts. The literature on relational contracts focuses on how self-enforceable terms can be supported without the use of enforceable contracts. Among the possible answers to this are repetition and norms.
Keywords: Long-Term Contracts, Renegotiation Proofness, Relational Contracts, Repeated Games, Norms