Advanced Search
MyIDEAS: Login to save this paper or follow this series

Renegotiation-Proof Relational Contracts with Side Payments

Contents:

Author Info

  • Kranz, Sebastian
  • Ohlendorf, Susanne

Abstract

We study infinitely repeated two player games with perfect information, where each period consists of two stages: one in which the parties simultaneously choose an action and one in which they can transfer money to each other. We first derive simple conditions that allow a constructive characterization of all Pareto-optimal subgame perfect payoffs for all discount factors. Afterwards, we examine different concepts of renegotiation-proofness and extend the characterization to renegotiation-proof payoffs.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. 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.
File URL: http://epub.ub.uni-muenchen.de/13293/1/259.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 259.

as in new window
Length:
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:trf:wpaper:259

Contact details of provider:
Postal: Geschwister-Scholl-Platz 1, D-80539 Munich, Germany
Phone: +49-(0)89-2180-3405
Fax: +49-(0)89-2180-3510
Web page: http://www.sfbtr15.de/
More information through EDIRC

Related research

Keywords: renegotiation; infinitely repeated games; side payments; optimal penal codes;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Miklos-Thal, Jeanine, 2008. "Optimal Collusion under Cost Asymmetry," MPRA Paper 11044, University Library of Munich, Germany.
  2. Jonathan Levin, 2000. "Relational Incentive Contracts," Working Papers, Stanford University, Department of Economics 01002, Stanford University, Department of Economics.
  3. Blonski, Matthias & Spagnolo, Giancarlo, 2002. "Relational Contracts and Property Rights," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3460, C.E.P.R. Discussion Papers.
  4. Katherine Doornik, 2006. "Relational Contracting in Partnerships," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 15(2), pages 517-548, 06.
  5. Douglas Bernheim, B. & Ray, Debraj, 1989. "Collective dynamic consistency in repeated games," Games and Economic Behavior, Elsevier, Elsevier, vol. 1(4), pages 295-326, December.
  6. Farrell, Joseph & Maskin, Eric, 1987. "Renegotiation in Repeated Games," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt9wv3h5jb, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  7. Andersson, Ola & Wengstrom, Erik, 2007. "A note on renegotiation in repeated Bertrand duopolies," Economics Letters, Elsevier, Elsevier, vol. 95(3), pages 398-401, June.
  8. Joseph E. Harrington Jr. & Andrzej Skrzypacz, 2007. "Collusion under monitoring of sales," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 314-331, 06.
  9. Fong, Yuk-fai & Surti, Jay, 2009. "The optimal degree of cooperation in the repeated Prisoners' Dilemma with side payments," Games and Economic Behavior, Elsevier, Elsevier, vol. 67(1), pages 277-291, September.
  10. Harrington, Joseph E., 2006. "How Do Cartels Operate?," Foundations and Trends(R) in Microeconomics, now publishers, now publishers, vol. 2(1), pages 1-105, August.
  11. Joseph E. Harrington, Jr, 2006. "How Do Cartels Operate?," Economics Working Paper Archive, The Johns Hopkins University,Department of Economics 531, The Johns Hopkins University,Department of Economics.
  12. Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, Econometric Society, vol. 56(2), pages 383-96, March.
  13. Baliga, Sandeep & Evans, Robert, 2000. "Renegotiation in Repeated Games with Side-Payments," Games and Economic Behavior, Elsevier, Elsevier, vol. 33(2), pages 159-176, November.
  14. McCutcheon, Barbara, 1997. "Do Meetings in Smoke-Filled Rooms Facilitate Collusion?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(2), pages 330-50, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Sebastian Kranz, 2012. "Discounted Stochastic Games with Voluntary Transfers," Levine's Working Paper Archive 786969000000000423, David K. Levine.
  2. James Malcomson, 2010. "Relational Incentive Contracts," Economics Series Working Papers 508, University of Oxford, Department of Economics.
  3. Andersson Ola & Wengström Erik, 2010. "Costly Renegotiation in Repeated Bertrand Games," The B.E. Journal of Theoretical Economics, De Gruyter, De Gruyter, vol. 10(1), pages 1-12, December.
  4. Goldlücke, Susanne & Kranz, Sebastian, 2012. "Infinitely repeated games with public monitoring and monetary transfers," Journal of Economic Theory, Elsevier, Elsevier, vol. 147(3), pages 1191-1221.
  5. Sebastian Kranz, 2013. "Relational Contracting, Repeated Negotiations, and Hold-Up," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1888, Cowles Foundation for Research in Economics, Yale University.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:trf:wpaper:259. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alexandra Frank).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.