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Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Contract Renegotiation and Rent Re-distribution: Who Gets Raked Over the Coals?
Author(s): Kosnik, Lea
Lange, Ian
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Keywords: Contract Renegotiation
Coal Contracts
Acid Rain
Issue Date: Sep-2011
Citation: Kosnik L & Lange I (2011) Contract Renegotiation and Rent Re-distribution: Who Gets Raked Over the Coals?, Journal of Environmental Economics and Management, 62 (2), pp. 155-165.
Abstract: Policy shocks affect the rent distribution in long-term contracts, which can lead to such contracts being renegotiated. We seek an understanding of what aspects of contract design, in the face of a substantial policy shock, affect the propensity to renegotiate. We test our hypotheses using data on U.S. coal contracts after the policy shock of the 1990 Clean Air Act Amendments. Contracts are divided into two categories, those that were renegotiated following the shock and those that were not. Characteristics of the contract are used to explain whether or not the contract was ultimately renegotiated. Results provide guidance on rent re-distribution and contract renegotiation more generally and are applicable to contemporary policy issues such as climate change legislation
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Rights: Published in Journal of Environmental Economics and Management by Elsevier.; This is the peer reviewed version of this article.; NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Environmental Economics and Management. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Environmental Economics and Management, VOL 62, ISSUE 2, (September 2011). DOI: 10.1016/j.jeem.2011.03.006

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