Changing circumstances and levelled commitment: A compensatory approach to contracting.
OA Location
Author(s)
Ponka, I
Jennings, NR
Type
Conference Paper
Abstract
In dynamic and uncertain e-commerce settings, the value of contracts can change after they have been entered into. Sometimes this can make the contract in question counterproductive to the affected parties. Given this, leveled commitment contracts, in which one agent pays the other a fee to be released from their decommitment, are widely used. However, these fees are often seen only as a deterrent of decommitment and the fact that the decommitment also affects the other party and the society in general is usually ignored. This paper investigates an alternative view, coming from law, that sees the decommitment fees as a means of compensating the victim for their loss. Moreover, we show that these compensatory policies can outperform their traditional noncompensatory counterparts in terms of total utility (the sum of all agent?s utilities) in situations in which the utility of one of the parties decreases after the contract has been entered into, but before it is due to be performed.
Date Issued
2007
Citation
2007, pp.141-148
Start Page
141
End Page
148
Identifier
http://eprints.soton.ac.uk/264223/
Source
IEEE Joint Conference on E-Commerce Technology & Enterprise Computing, E-Commerce & E-Services.
Subjects
Science & Technology
Technology
Computer Science, Artificial Intelligence
Computer Science, Information Systems
Computer Science, Theory & Methods
Computer Science
AGENTS
Publication Status
Unpublished