On Watson’s Non-Forcing Contracts and Renegotiation

Roberto Serrano

Working Papers from CEMFI

Abstract: Watson (2007) proposes non-forcing contracts as a way to show the limitations of the mechanism design program with ex-post renegotiation (Maskin and Moore (1999)). If one takes a partial implementation approach, as Watson does, we show that nonforcing contracts do not constitute an intermediate paradigm between implementation with no renegotiation and with ex-post renegotiation. Moreover, taking a full implementation approach, non-forcing contracts fail if and only if one goes outside of the constraints identified by Maskin and Moore, because of the appearance of undesirable equilibria.

Date: 2009-09
New Economics Papers: this item is included in nep-cta and nep-gth
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Citations: View citations in EconPapers (2)

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https://www.cemfi.es/ftp/wp/0907.pdf (application/pdf)

Related works:
Journal Article: On Watson's Non-Forcing Contracts and Renegotiation (2009)
Working Paper: On Watson's Non-Forcing Contracts and Renegotiation (2004)
Working Paper: On Watsonís Non-Forcing Contracts and Renegotiation (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:cmf:wpaper:wp2009_0907

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