Equilibrium Limited Liability Contracts in a Landlord-Tenant Market
AbstractWe propose a model based on competitive markets in order to analyse an economy with several homogeneous landlords and heterogeneous tenants. We model the landlord- tenant economy as a two-sided matching game and characterise the equilibrium of this market. In equilibrium, contracts are Pareto optimal, and the incremental surplus generated in a landlord-tenant relationship accrues to the tenant. We also suggest policy measures in relation to efficiency and income distribution.
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Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 99.
Date of creation: Sep 2003
Date of revision:
Moral hazard; limited liability; endogenous matching; optimal contracts;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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