University of Virginia Legal Working Paper Series

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University of Virginia John M. Olin Program in Law and Economics Working Paper Series

 

Integrating an Agreement to Induce Information Disclosure

Albert H. Choi, University of Virginia School of Law

Abstract

By integrating a written agreement, contracting parties can disallow certain types of extrinsic evidence from being introduced at trial. I examine the role played by the parol evidence rule and integration in an asymmetric information environment. I demonstrate that integration allows an uninformed party to better induce information disclosure from an informed party by penalizing non-disclosure and limiting ex post opportunistic behavior. I also show that while the uninformed party will always prefer integration, welfare may be lower with integration.

Subject Area

Law and Economics

Recommended Citation

Albert H. Choi, "Integrating an Agreement to Induce Information Disclosure" (February 2008). University of Virginia Legal Working Paper Series. University of Virginia John M. Olin Program in Law and Economics Working Paper Series. Working Paper 41.
http://law.bepress.com/uvalwps/olin/art41

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