Suchergebnisse

Recent contributions show that climate agreements with broad participation can be implemented as weakly renegotiation-proof equilibria in simple models of greenhouse gas abatement where each country has a binary choice between cooperating (i.e., abate emissions) or defecting (no abatement). Here we show that this result carries over to a model where countries have a continuum of emission choices. Indeed, a Pareto-efficient climate agreement can always be implemented as a weakly renegotiation-proof equilibrium, for a sufficiently high discount factor. This means that one need not trade-off a 'narrow but deep' treaty with a 'broad but shallow' treaty.

This paper investigates the interaction between a privately informed firm's contracts for labour and its contracts for credit. The analysis shows that if the worker has no ex post outside opportunities, or if the liquidation value of the firm is large, then the credit contract can always be state‐independent; if the worker has outside opportunities and the liquidation value is small, then the credit contract must be state‐dependent. However, if the worker is unable to precommit not to renegotiate with the firm, then the credit contract must be state‐independent to ensure renegotiation‐proofness and protect the interests of the creditor. This leads to credit rationing and under‐investment.

This paper extends the concept of weak renegotiation-proof equilibrium (WRP) to allow for costly renegotiation and shows that even small renegotiation costs can have dramatic effects on the set of equilibria. More specifically, the paper analyzes the infinitely repeated Bertrand game. It is shown that for every level of renegotiation cost, there exists a discount factor such that any collusive profit can be supported as an equilibrium outcome. Hence, any arbitrary small renegotiation cost will suffice to facilitate collusive outcomes for sufficiently patient firms. This result stands in stark contrast to the unique pure strategy WRP equilibrium without renegotiation costs, which implies marginal-cost pricing in every period. Moreover, in comparison to the findings of McCutcheon (1997), who states that renegotiation costs have to be substantial to facilitate collusion, this result points to a quite different conclusion.

"Gives effect to all amendments and additions published in the Federal register to and including "March 1, 1964." ; Mode of access: Internet.