Dynamic Relational Contracts with Consumption Constraints

This file is part of IDEAS, which uses RePEc data

Dynamic Relational Contracts with Consumption Constraints

Author Info

Jonathan P Thomas () (Economics, University of Edinburgh)
Tim Worrall () (Economics, Keele University)

Additional information is available for the following registered author(s):

Abstract

This paper considers a long-term relationship between two agents who undertake costly actions or investments which produce a joint benefit. Agents have an opportunity to expropriate some of the joint benefit for their own use. The question asked is how to structure the investments and division of the surplus over time so as to avoid expropriation. It is shown that investments may be either above or below the efficient level and that actions and the division of the surplus converges to a stationary solution at which either both investment levels are efficient or both are below the efficient level.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info
Paper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2007/16.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 31 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:kee:kerpuk:2007/16

Note: The authors gratefully acknowledge the financial support of the Economic and Social Research Council (Research Grant: RES-000-23-0865). We also thank in particular Pierre Dubois and Francisco Gonzalez for helpful comments. An earlier version of this paper had the title "Self-enforcing contracts with action dynamics".
Contact details of provider:
Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom
Phone: +44 (0)1782 584581
Fax: +44 (0)1782 717577
Email:
Web page: http://www.keele.ac.uk/depts/ec/cer/
More information through EDIRC

Order Information:
Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
Email:
Web: http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm

For technical questions regarding this item, or to correct its listing, contact: (Martin E. Diedrich).

Other versions of this item:

Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
D92 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Firm Choice and Growth, Investment, or Financing
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-01-26 (All new papers)
NEP-GTH-2008-01-26 (Game Theory)

This item is featured on the following reading lists:

Canadian Macro Study Group

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Ruthira Naraidoo & Patrick Minford & Ioannis A. Venetis, 2006. "The political economy of unemployment and threshold effects. A nonlinear time series approach," Keele Economics Research Papers KERP 2006/21, Centre for Economic Research, Keele University. [Downloadable!]
Cinzia Alcidi & Alessandro Flamini & Andrea Fracasso, 2005. "``Taylored'' Rules. Does One Fit All?," Keele Economics Research Papers KERP 2007/06, Centre for Economic Research, Keele University, revised Mar 2007. [Downloadable!]
Ligon, Ethan & Thomas, Jonathan P & Worrall, Tim, 2002. "Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies," Review of Economic Studies, Blackwell Publishing, vol. 69(1), pages 209-44, January.

Full references

Statistics
Access and download statistics

Did you know? You too can volunteer for RePEc, for example by editing a NEP report.

This page was last updated on 2009-11-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.