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THE THEORY OF WARRANTY CONTRACTS
Author(s) -
Emons Winand
Publication year - 1989
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/j.1467-6419.1989.tb00057.x
Subject(s) - warranty , incentive , economics , actuarial science , contract theory , business , microeconomics , political science , law
. This paper surveys theories of the existence and design of warranty contracts. Insurance, signalling, and incentive motives are used to explain the existence of warranties. The incorporation of imperfections that prevent warranties from serving their basic purposes in a first‐best way describes actual warranty practices.