Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45428
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dc.contributor.authorKoçkesen, Leventen_US
dc.contributor.authorGerratana, Emanueleen_US
dc.date.accessioned2010-11-03en_US
dc.date.accessioned2011-05-09T09:34:35Z-
dc.date.available2011-05-09T09:34:35Z-
dc.date.issued2009en_US
dc.identifier.urihttp://hdl.handle.net/10419/45428-
dc.description.abstractIt is well known that non-renegotiable contracts with third parties may have an effect on the outcome of a strategic interaction and thus serve as a commitment device. We address this issue when contracts are renegotiable. More precisely, we analyze the equilibrium outcomes of twostage games with renegotiation-proof third-party contracts in relation to the equilibrium outcomes of the same game without contracts. We assume that one of the parties in the contractual relationship is unable to observe everything that happens in the game when played by the other party. This implies that contracts are incomplete and we show that such incompleteness restricts the set of equilibrium outcomes to a subset of Nash equilibrium outcomes of the game without contracts. Introducing renegotiation, in general, imposes further constraints and in some games implies that only subgame perfect equilibrium outcomes can be supported. However, there is a large class of games in which non-subgame perfect equilibriumoutcomes can also be supported, and hence, third-party contracts still have strategic implications even when they are renegotiable.en_US
dc.language.isoengen_US
dc.publisher|aTÜSİAD-Koç University Economic Research Forum |cIstanbulen_US
dc.relation.ispartofseries|aTÜSİAD-Koç University Economic Research Forum working paper series |x0908en_US
dc.subject.jelC72en_US
dc.subject.jelC78en_US
dc.subject.jelD86en_US
dc.subject.jelL13en_US
dc.subject.ddc330en_US
dc.subject.keywordThird-Party Contractsen_US
dc.subject.keywordStrategic Delegationen_US
dc.subject.keywordIncomplete Contractsen_US
dc.subject.keywordRenegotiationen_US
dc.subject.stwUnvollständiger Vertragen_US
dc.subject.stwNash-Gleichgewichten_US
dc.subject.stwNichtkooperatives Spielen_US
dc.subject.stwTheorieen_US
dc.titleStrategic effects of incomplete and renegotiation-proof contractsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn638341078en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US

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