Assume that A values his house at $90,000. B is willing to pay $110,000 for As house

Question:

Assume that A values his house at $90,000. B is willing to pay $110,000 for A’s house in order to relocate closer to work. (Forget about person C for purposes of this question). After signing a contract, B’s employer announces that the company will move to another city. In view of this fact, the value of the house to B is reduced to $75,000. From an efficiency viewpoint, who should own the house, A or B? How will the parties achieve efficiency in allocating the house if the court enforces the contract?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Law and economics

ISBN: 978-0132540650

6th Edition

Authors: Robert cooter, Thomas ulen

Question Posted: