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Standards of behavior and time generate tacit cooperation in hierarchical relationship

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  • Jean-Pierre Ponssard

    (Department of Economics, Ecole Polytechnique - Polytechnique - X - CNRS - Centre National de la Recherche Scientifique)

  • Francis Kramarz

    (CREST - Centre de Recherche en Économie et Statistique - INSEE - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique)

Abstract

This paper provides a game theoritic rationale for the use of standards of behavior in hierarchies. lt proves that the common knowledge of such standards in a long term relationship generates tacit cooperation as long as the time horizon is far enough and that intermediary observations are feasible. Though mathematically similar to the well known equation effect it is argued that the observed result is more robust with respect to the players incentive to view their relationship through such a formalization.
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Suggested Citation

  • Jean-Pierre Ponssard & Francis Kramarz, 1992. "Standards of behavior and time generate tacit cooperation in hierarchical relationship," Post-Print hal-00363941, HAL.
  • Handle: RePEc:hal:journl:hal-00363941 Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00363941
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    1. Van de Ven, Andrew R., 1986. "Central Problems in the Management of Innovation," Agricultural Research Policy Seminar 139708, University of Minnesota Extension.
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