—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 considers the nonlinear theory of G-martingales as introduced by Peng in [16, 17]. A martingale … representation theorem for this theory is proved by using the techniques and the results established in [20] for the second order …

optimal taxation example that illustrates our methodology. Our results suggest that the allocations and tax rates with the …