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Pareto improvements by in-kind-transfers

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  • Stähler, Frank

Abstract

This paper shows that in-kind-transfers are an effective instrument to stabilize agreements when compliance cannot be guaranteed. It demonstrates the weak superiority of in-kind-transfers for a unilateral relationship between two agents. In particular, it proves that, under conditions of perfect knowledge and necessary selfenforcement of contracts, both agents are at least not worse off by in-kind-transfers compared to monetary payments when no selfenforcing contract exists which,is based on monetary payments. This result holds for finitely and for infinitely repeated games.

Suggested Citation

  • Stähler, Frank, 1992. "Pareto improvements by in-kind-transfers," Kiel Working Papers 541, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:541
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    File URL: https://www.econstor.eu/bitstream/10419/47022/1/256767629.pdf
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    References listed on IDEAS

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    3. Bruce, Neil & Waldman, Michael, 1991. "Transfers in Kind: Why They Can Be Efficient and Nonpaternalistic," American Economic Review, American Economic Association, vol. 81(5), pages 1345-1351, December.
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    6. Jonathan Thomas & Tim Worrall, 1988. "Self-Enforcing Wage Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 55(4), pages 541-554.
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    Cited by:

    1. Stähler, Frank, 1994. "Some reflections on multilateral environmental agreements," Kiel Working Papers 647, Kiel Institute for the World Economy (IfW Kiel).
    2. Frank Stähler, 1996. "On International compensations for environmental stocks," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 8(1), pages 1-13, July.
    3. Stähler, Frank, 1993. "On the economics of international environmental agreements," Kiel Working Papers 600, Kiel Institute for the World Economy (IfW Kiel).
    4. Heister, Johannes & Stähler, Frank, 1994. "Globale Umweltpolitik und joint implementation: Eine ökonomische Analyse für die Volksrepublik China," Kiel Working Papers 644, Kiel Institute for the World Economy (IfW Kiel).

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