Self-evident events and the value of linking ?

• 成果类型: Article
• 署名作者: Chan, Jimmy; Zhang, Wenzhang
• 署名单位: National Taiwan University; Chinese University of Hong Kong; Zhejiang University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105691
• 发表日期: 2023
• 关键词: Repeated partnerships; Value of linking; Self-evident events; repeated games; General monitoring

摘要

We study a T-period contracting game between a group of players without access to external financing. We show that the long-term efficiency loss is bounded from below by the need to vary incentives across self-evident events. When T is large, the efficiency bound can be approached by a contract that involves side payments between players. Our results apply to all monitoring structures and strategy profiles. They encompass the inefficiency result in Abreu et al. (1991), as well as the approximate-efficiency results in Compte (1998), Obara (2009), and Chan and Zhang (2016). & COPY; 2023 Elsevier Inc. All rights reserved.