Pooling promises with moral hazard

Catarina Goulão () and Luca Panaccione
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Catarina Goulão: Toulouse School of Economics (GREMAQ, INRA)

Economics Bulletin, 2015, vol. 35, issue 1, 460-465

Abstract: We extend the framework of Dubey and Geanakoplos (2002) to the case of moral hazard. We analyze the equilibrium properties of the model and we show that equal ex-ante consumers may choose to promise differently, and, as a consequence, choose different actions. This illustrates how the pool of voluntary promises can induce redistribution from consumers with high expected endowment to those with low expected endowment.

Keywords: moral hazard; pool of promises (search for similar items in EconPapers)
JEL-codes: D3 D8 (search for similar items in EconPapers)
Date: 2015-03-11
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Related works:
Working Paper: Pooling Promises with Moral Hazard (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-14-00093

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