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Commitment with renegotiable debt contracts and verifiable cash flow

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We study a Buyer-Seller relationship with one-sided relationship-specific investment. Debt commits the Seller not to trade at a low price even though it is renegotiable, and the cash flow is verifiable.

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Elsevier Science Sa

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Economics

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Economics Letters

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10.1016/j.econlet.2007.06.035

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