Ex ante contracting with endogenously determined communication plans

Jülide Yazar ()
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Jülide Yazar: Department of Economics, Ohio Wesleyan University, Delaware, OH 43015, USA

Economic Theory, 2001, vol. 18, issue 2, 439-450

Abstract: In this paper we introduce a new model of ex ante contracting for economies with asymmetric information to examine endogenously determined communication plans for information sharing in the interim stage. In contrast to the models used in previous research, in the present model agents negotiate not only on a contract of state contingent allocations but also on a communication plan, a set of rules describing how agents will reveal part of their private information at the interim stage to execute the trade contracts. We prove a result about the nested structure of the set of allocations implementable by various communication plans and establish the existence of core strategies for this cooperative game under various regularity conditions.

Keywords: Exchange economies with asymmetric information; Cooperative games; Information processing. (search for similar items in EconPapers)
JEL-codes: C71 D51 D82 (search for similar items in EconPapers)
Date: 2001-05-08
Note: Received: 4 March 1998; revised version: 17 September 1999
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