Simple efficient contracts in complex environments

• 成果类型: Article
• 署名作者: Evans, Robert
• 署名单位: University of Cambridge
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.1111/j.1468-0262.2008.00844.x
• 发表日期: 2008
• 页码: 459-491
• 关键词: incomplete contracts; sunk costs; RENEGOTIATION; implementation; investments; DESIGN

摘要

This paper studies a general model of holdup in a setting encompassing the models of Segal (1999) and Che and Hausch (1999) among others. It is shown that if renegotiation is modeled as an infinite-horizon noncooperative bargaining game, then, with a simple initial contract, an efficient equilibrium will generally exist. The contract is robust in the sense that it does not depend on fine details of the model. The contract gives authority to one party to set the terms of trade and gives the other party a nonexpiring option to trade at these terms. The difference from standard results arises because the initial contract ensures that the renegotiation game has multiple equilibria; the multiplicity of continuation equilibria can be used to enforce efficient investment.