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Soft transactions

Listed author(s):
  • Jeitschko, Thomas D.
  • Lau, C. Oscar

This paper considers “soft debt” as a social convention that facilitates long-term reciprocal relationships. A player is said to follow a soft debt strategy if his decisions depend on the entire history with his counterpart only through their accrued soft debt balance. Under discrete benefits, there exist equilibria in which the players keep reciprocating as long as the debt balance does not exceed a certain limit.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167268117301610
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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 141 (2017)
Issue (Month): C ()
Pages: 122-134

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Handle: RePEc:eee:jeborg:v:141:y:2017:i:c:p:122-134
DOI: 10.1016/j.jebo.2017.06.003
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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