Author Question: How does opportunistic behavior affect a contract?[br][br][b][color=#566D7E]Question ... (Read 72 times)

waynest · **on:** Jun 30, 2018

How does opportunistic behavior affect a contract?

Question 2

In Argentina, agricultural production is directly related to
A) government subsidies.
B) price controls.
C) import tariffs.
D) well-defined property rights..

mbcrismon · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Opportunism creates a possibility that a party can gain by disregarding or breaking the rules in a contract. It allows a party to profit from actions it knows the contract might not allow, hoping the other party will drop the dispute or pay up. If people never behave opportunistically, a trader's word is as good as his bond. People can concentrate on maximizing the value their transaction creates and bargaining to mutually beneficial outcomes where the contract is incomplete or unclear.

Answer to Question 2

D