Contract design and non-cooperative renegotiation

• 成果类型: Article
• 署名作者: Evans, Robert; Reiche, Soenje
• 署名单位: University of Cambridge; University of Cambridge; University of Cambridge; Centre National de la Recherche Scientifique (CNRS); Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2014.12.001
• 发表日期: 2015
• 页码: 1159-1187
• 关键词: Renegotiation; mechanism design; CONTRACT; COMMITMENT

摘要

We study a contract design setting in which the contracting parties cannot commit not to renegotiate previous contract agreements. In particular, we characterize the outcome functions that are implementable for an uninformed principal and an informed agent if, having observed the agent's contract choice, the principal can offer a new menu of contracts in its place. An outcome function can be implemented in this setting if and only if it is optimal for the principal for some belief over agent types which is more pessimistic, in the sense of the likelihood ratio order, than the prior. Furthermore, the outcome function cannot be too sensitive to variations in the agent's type. We show that the direct revelation mechanism which implements such a function when renegotiation can be prevented will also implement it in any equilibrium when it cannot, so the standard contract is robust to renegotiation. (c) 2014 Elsevier Inc. All rights reserved.