Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94050
Authors: 
Gürtler, Oliver
Year of Publication: 
2006
Series/Report no.: 
SFB/TR 15 Discussion Paper 110
Abstract: 
In this paper, I compare two different approaches to model implicit contracting, the infinite-horizon approach typically used in the literature and afinite-horizon approach building on an adverse-selection model. I demonstrate that even the most convincing result of the infinite-horizon approach, namely that implicit contracting is improved, if the discountrate is lowered, does not carry over to the alternative modeling approach. Predictions of the first approach should therefore be handled with care and subject to athorough reinvestigation.
Subjects: 
Trust
finite horizon
infinite horizon
discounting
implicit contracting
JEL: 
D82
D83
J33
M52
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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