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Chapter 10. Recursive Contracts and Endogenously Incomplete Markets
Golosov, M.; Tsyvinski, A.; Werquin, N. - In: Handbook of macroeconomics : volume 2, v. 2A-2B SET, (pp. 725-841). 2016
In this chapter we study dynamic incentive models in which risk sharing is endogenously limited by the presence of informational or enforcement frictions. We comprehensively overview one of the most important tools for the analysis such problems—the theory of recursive contracts. Recursive...
Persistent link: https://www.econbiz.de/10014024287
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Moral Hazard and Efficiency in General Equilibrium with Anonymous Trading
Acemoglu, Daron - 2010
A "folk theorem" originating, among others, in the work of Stiglitz maintains that competitive equilibria area always or "generically" inefficient (unless contracts directly specify consumption levels as in Prescott and Townsend, thus bypassing trading in anonymous markets). This paper...
Persistent link: https://www.econbiz.de/10013144184
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Default and Punishment in General Equilibrium
Dubey, Pradeep K.; Geanakoplos, John; Shubik, Martin - 2004
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our...
Persistent link: https://www.econbiz.de/10014070241
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Efficiency of Competitive Equilibria With Hidden Action : The Role of Separable Preference
Panaccione, Luca - 2007
In the present paper we study the efficiency properties of competitive equilibria in economies with hidden action and multiple goods. We borrow the description of the economy from Lisboa [3] and we apply a method of proof close in spirit to the one used in the literature on incomplete financial...
Persistent link: https://www.econbiz.de/10012730371
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Default and Punishment in General Equilibrium
Dubey, Pradeep K.; Geanakoplos, John; Shubik, Martin - 2003
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our...
Persistent link: https://www.econbiz.de/10014128751
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Default and Punishment in General Equilibrium
Dubey, Pradeep K.; Geanakoplos, John; Shubik, Martin - 2004
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our...
Persistent link: https://www.econbiz.de/10014074211
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Public policy for venture capital
Keuschnigg, Christian; Nielsen, Søren Bo - 2001
investment, and output subsidies at the production stage. While these measures stimulate entrepreneurship, only cost …
Persistent link: https://www.econbiz.de/10011398877
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Public policy for venture capital
Keuschnigg, Christian; Nielsen, Søren Bo - 2001
investment, and output subsidies at the production stage. While these measures stimulate entrepreneurshiip, only cost …
Persistent link: https://www.econbiz.de/10011536274
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Tax policy, venture capital, and entrepreneurship
Keuschnigg, Christian; Nielsen, Søren Bo - 2000
, progressive taxation as well as investment and output subsidies to the entrepreneurial sector. …
Persistent link: https://www.econbiz.de/10011536625
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Moral Hazard, Investment, and Firm Dynamics
Ai, Hengjie - 2015
We present a dynamic general equilibrium model with heterogeneous firms. Owners of the firms delegate investment … decisions to managers, whose consumption and investment are private information. We solve the optimal incentive compatible … pattern of the relationships between firm size and firms' investment and dividend policies …
Persistent link: https://www.econbiz.de/10013037654