It's Now or Never: Deadlines and Cooperation
AbstractCooperation among opportunistic agents often breaks down when agents cannot observe one another's actions. The standard remedy for such a problem is a two-mode approach pioneered by Green and Porter (1984), where agents switch back and forth between cooperation and punishment mode. Here, I consider use of a deadline as an alternative. I find that, under certain conditions, imposing a deadline can induce cooperation with unobservable actions and that the optimal deadline can pay off dominates the optimal two-mode strategy.
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Bibliographic InfoPaper provided by Department of Economics, Emory University (Atlanta) in its series Emory Economics with number 1101.
Date of creation: Feb 2011
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