Where there is competitive bidding (i.e. both sides are bidding) the extra dimension of sacrificial bidding is added, and the theoretical optimum contract can be overtaken by the par contract. The par contract on a deal is that contract which results from optimal bidding by both sides and which neither side could improve by further bidding. It will either be equal to the optimum contract of one side or it will exceed the optimum contract of both sides. If the latter, it is only considered par if the doubled penalty is less than the value of the opposing optimum contract.
Read more about this topic: Optimum Contract And Par Contract
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