If the costs of negotiating and enforcing contracts are high relative to the benefits, buyers and sellers will have incentives to make economically efficient arrangements that increase value.

Question

Quizplus · Accepted Answer

High costs of negotiating and enforcing contracts can deter buyers and sellers from engaging in transactions, leading to less economically efficient arrangements, as the high costs can outweigh the potential benefits of the transaction.

If the Costs of Negotiating and Enforcing Contracts Are High