Contracting with externalities and outside options

• 成果类型: Article
• 署名作者: Bloch, F; Gomes, A
• 署名单位: Aix-Marseille Universite; Aix-Marseille Universite; University of Pennsylvania
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2004.11.004
• 发表日期: 2006
• 页码: 172-201
• 关键词: outside options; externalities; Coalitional bargaining

摘要

This paper proposes a model of multilateral contracting where players are engaged in two parallel interactions: they dynamically form coalitions and play a repeated normal form game with temporary and permanent decisions. We show that when outside options are independent of the actions of other players all Markov perfect equilibrium without coordination failures are efficient, regardless of externalities created by interim actions. Otherwise, in the presence of externalities on outside options, all Markov perfect equilibrium may be inefficient. This formulation encompasses many economic models, and we analyze the distribution of coalitional gains and the dynamics of coalition formation in four illustrative applications. (c) 2004 Elsevier Inc. All rights reserved.