A monotone comparative static result on contract incompleteness

Yasunori Watanabe ()
Additional contact information
Yasunori Watanabe: Manufacturing Management Research Center, The University of Tokyo

Economics Bulletin, 2008, vol. 4, issue 16, 1-8

Abstract: The purpose of this paper is to generalize the incomplete contract model of Bajari and Tadelis (2001) into a continuous model, and to derive the condition under which the monotone comparative statics (MCS) methods can be applied. I will show that a type of single-crossing condition on the isoprobability curves of uncertainty is necessary and suffcient for the availability of the MCS methods when a player has a supermodular ex post utility function. In this case, the greater the magnitude of uncertainty, the less his optimal contract allows the project to proceed smoothly.

JEL-codes: C6 D8 (search for similar items in EconPapers)
Date: 2008-06-12
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/pubs/EB/2008/Volume4/EB-08D80017A.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-08d80017

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().