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Recursive Contracts
| Content Provider | Semantic Scholar |
|---|---|
| Author | Marcet, Albert |
| Copyright Year | 1998 |
| Abstract | We obtain a recursive formulation for a general class of contracting problems involving incentive constraints. These constraints make the corresponding maximization (sup) problems non-recursive. Our approach consists of studying a recursive Lagrangian. Under standard general conditions, there is a recursive saddle-point (infsup) functional equation (analogous to a Bellman equation) that characterizes the recursive solution to the planner’s problem and forward-looking constraints. Our approach has been applied to a large class of dynamic contractual problems, such as contracts with limited enforcement, optimal policy design with implementability constraints, and dynamic political economy models. JEL classification: C61, C63, D58, E27 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://research.barcelonagse.eu/tmp/working_papers/552.pdf |
| Alternate Webpage(s) | http://www.sfu.ca/~kkasa/marcet98.pdf |
| Alternate Webpage(s) | http://www.econ.upf.es/deehome/what/wpapers/postscripts/337.pdf |
| Alternate Webpage(s) | http://www.iue.it/ECO/WP-Texts/ECO98-37.pdf |
| Language | English |
| Access Restriction | Open |
| Subject Keyword | Bellman equation Contract agreement Expectation–maximization algorithm Lagrangian (field theory) Recursion (computer science) Transaction counts and value totals - contract |
| Content Type | Text |
| Resource Type | Article |
