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Folk Theorem with One-sided Information

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  • Harrison Cheng

    (University of Southern California)

Abstract

A game with one-sided moral hazard is represented by a two-stage games. We give necessary and sufficient conditions for the folk theorem to hold. Equilibrium payoffs are generated by payoffs from pure strategy profiles which do not admit profitable nondetectable deviations. The enforceable maximum payoff is shown to be a better notion for the individually rational payoff. (Copyright: Elsevier)

Suggested Citation

  • Harrison Cheng, 2000. "Folk Theorem with One-sided Information," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(2), pages 338-363, April.
  • Handle: RePEc:red:issued:v:3:y:2000:i:2:p:338-363
    DOI: 10.1006/redy.1999.0079
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    1. David K. Levine & Aldo Rustichini, 2000. "Introduction," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(2), pages 213-215, April.
    2. David K Levine & Aldo Rustichini, 2000. "Introduction: The Dynamic Games Special Issue," Levine's Working Paper Archive 2127, David K. Levine.

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