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Modelling "Horizontal" Interaction of Economic Agents with the Help of a Collection of Games

Listed author(s):
  • Sokolovskyi Dmytro B.


    (Institute of Industrial Economics of NAS of Ukraine)

The subject of the article is modelling horizontal and vertical interaction of economic subjects, realised, in particular, by sales and employment contracts. Complexity of models of "horizontal" relationship is the reason of significantly smaller, compared to the models of "vertical" relationship, buildups. That is why, the article makes an effort to simplify the general model of "horizontal" interaction of economic agents. The article offers a model of "horizontal" relationship of two economic subjects, each of which can stick to a contract concluded between them, avoid its execution and control contract execution by its opposite. The article establishes that the sales contract could be determined by a collection of games used for modelling employment contract through decomposition of the game for describing of interaction of the general type. It specifies conditions of this decomposition. In other words, the sales contract model could be positioned as a generalisation of the employment contract model. Moreover, it formulates decision making by an individual agent with respect to distribution of limited resources between the control of the opposite and planning of own activity. The offered models could be applied in the contract theory, for example, for a more detailed description of the sales contract. It is planned to use the results in various subject fields through specification of payment functions of the model games. Better understanding of their nature with the help of study of the offered models would facilitate increase of quality and reasoning of contracts, for example, from the legal point of view. It is planned to conduct further development of studies in the direction of solutions of models that have the production type at the moment, finding conditions of the Nash equilibrium and analysing logic of evolution of interaction of counter-agents.

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Article provided by RESEARCH CENTRE FOR INDUSTRIAL DEVELOPMENT PROBLEMS of NAS (KHARKIV, UKRAINE), Kharkiv National University of Economics in its journal Business Inform.

Volume (Year): (2013)
Issue (Month): 9 ()
Pages: 90-94

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Handle: RePEc:idp:bizinf:y:2013:i:9:p:90_94
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References listed on IDEAS
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  1. Joseph E. Stiglitz, 1974. "Incentives and Risk Sharing in Sharecropping," Review of Economic Studies, Oxford University Press, vol. 41(2), pages 219-255.
  2. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, Oxford University Press, vol. 97(4), pages 543-569.
  3. Steven Shavell, 1979. "Risk Sharing and Incentives in the Principal and Agent Relationship," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 55-73, Spring.
  4. James A. Mirrlees, 1976. "The Optimal Structure of Incentives and Authority Within an Organization," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 105-131, Spring.
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