Errors of I and II Types in Economic Exchanges with Third Party Enforcement
AbstractCoordination and distribution effects in economic exchanges with third party enforcement due to errors of I and II types are at the center of the article. Based on idea of opportunity for equilibrium Pareto-improvement in one shot prisoners’ dilemma game by third-party enforcer it has been shown not only constraints on cost of enforcement services but consequences of errors of I and II types both non-discriminatory and discriminatory cases. Discrimination by third party is analyzed not only from the players direct payment for services perspective but from fines, compensations and errors probabilities too. Errors of I and II types in rules enforcement are analyzed in relation to analogous errors in rules design with some implication for antimonopoly issues.
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Bibliographic InfoArticle provided by New Economic Association in its journal Journal of the New Economic Association.
Volume (Year): (2011)
Issue (Month): 10 ()
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errors of I and II types; rules enforcement; prisoners’ dilemma; coordination and distributive aspects of institutions;
Find related papers by JEL classification:
- D60 - Microeconomics - - Welfare Economics - - - General
- H40 - Public Economics - - Publicly Provided Goods - - - General
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
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