Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98574
Authors: 
Watson, Joel
Year of Publication: 
2013
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Publisher:] MDPI [Place:] Basel [Volume:] 4 [Year:] 2013 [Issue:] 3 [Pages:] 457-496
Abstract: 
This paper examines a general model of contract in multi-period settings with both external and self-enforcement. In the model, players alternately engage in contract negotiation and take individual actions. A notion of contractual equilibrium, which combines a bargaining solution and individual incentive constraints, is proposed and analyzed. The modeling framework helps identify the relation between the manner in which players negotiate and the outcome of the long-term contractual relationship. In particular, the model shows the importance of accounting for the self-enforced component of contract in the negotiation process. Examples and guidance for applications are provided, along with existence results and a result on a monotone relation between 'activeness of contracting' and contractual equilibrium values.
Subjects: 
external enforcement
self-enforcement
negotiation
agreements
contractual equilibrium
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article
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