—the theory of recursive contracts. Recursive formulations allow us to reduce often complex models to a sequence of essentially … of the basic theory: the Revelation Principle, formulating and simplifying the incentive constraints, using promised … advanced topics: duality theory and Lagrange multiplier techniques, models with lack of commitment, and martingale methods in …

This paper presents a tractable framework for studying frictionless matching in school, work, and marriage when … communicate and coordinate at lower resource cost. The theory delivers full task specialization in the labor and education markets …, but incomplete specialization in marriage. It also captures well-known matching patterns in each of these sectors …