Editing Specific performance (section)

== Law and economics ==
In [[contract theory]], economists have compared specific performance to at-will contracts.<ref>{{Cite journal |last=Fares |first=M'hand |date=2006 |title=Renegotiation Design and Contract Solutions to the Hold-Up Problem |url=https://doi.org/10.1111/j.1467-6419.2006.00266.x |journal=Journal of Economic Surveys |volume=20 |issue=5 |pages=731–756 |doi=10.1111/j.1467-6419.2006.00266.x |s2cid=155061589 |issn=0950-0804|url-access=subscription }}</ref> Suppose that a seller and a buyer have agreed to trade a good in the future. In the case of specific performance, delivery of the good can be mandated by the court, while in the case of at-will contracting, the seller always has the right to walk away from the contract. [[Oliver Hart (economist)|Hart]] and [[John Moore (economist)|Moore]] (1988) have shown that if only at-will contracts are enforceable, then the parties have insufficient incentives to make relationship-specific investments.<ref>{{Cite journal |last1=Hart |first1=Oliver |last2=Moore |first2=John |date=1988 |title=Incomplete Contracts and Renegotiation |url=https://www.jstor.org/stable/1912698 |journal=Econometrica |volume=56 |issue=4 |pages=755–785 |doi=10.2307/1912698 |jstor=1912698 |hdl=1721.1/63746 |issn=0012-9682|hdl-access=free }}</ref> Subsequently, several authors such as [[Philippe Aghion|Aghion]] et al. (1994) have shown that the underinvestment problem (sometimes called the [[hold-up problem]]) can be solved if specific performance contracts are feasible.<ref>{{Cite journal |last1=Aghion |first1=Philippe |last2=Dewatripont |first2=Mathias |last3=Rey |first3=Patrick |date=1994 |title=Renegotiation Design with Unverifiable Information |url=https://www.jstor.org/stable/2951613 |journal=Econometrica |volume=62 |issue=2 |pages=257–282 |doi=10.2307/2951613 |jstor=2951613 |issn=0012-9682}}</ref> However, these conclusions rely on the assumption that there are no [[Information asymmetry|information asymmetries]]. Schmitz (2022) has pointed out that if the seller may gain an informational advantage over the buyer after the contract has been signed, then at-will contracts may sometimes be preferable from an economic efficiency point-of-view.<ref>{{Cite journal |last=Schmitz |first=Patrick W. |date=2022 |title=How (Not) to Purchase Novel Goods and Services: Specific Performance versus At-Will Contracts |journal=Economic Journal |volume=132|issue=647 |pages=2563–2577 |doi=10.1093/ej/ueac024 |doi-access=free }}</ref>