Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/168136
Authors: 
Martin, Simon
Schlag, Karl
Year of Publication: 
2017
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2017: Alternative Geld- und Finanzarchitekturen - Session: Economic Theory C03-V2
Abstract: 
When should one pay for delivery of a good if there are no institutions? We suggest to break up the transaction into many small rounds of investment and payment. We show that the efficient investment can be implemented in an epsilon-subgame perfect equilibrium for any given epsilon if the invest technology is concave and there are sufficiently many rounds of investment. This shows that the holdup problem that emerges from backwards induction in a finite horizon is not robust.
JEL: 
D23
C72
L14
Document Type: 
Conference Paper

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