Theoretical Foundations of Relational Incentive Contracts

Joel Watson

University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego

Abstract: This article describes the emerging game-theoretic framework for modeling long-term contractual relationships with moral hazard. The framework combines self-enforcement and external enforcement, accommodating alternative assumptions regarding how actively the parties initially set and renegotiate the terms of their contract. A progression of theoretical components is reviewed, building from the recursive formulation of equilibrium continuation values in repeated games. A principal-agent setting serves as a running example.

Keywords: Clinical; Research (search for similar items in EconPapers)
Date: 2021-08-05
New Economics Papers: this item is included in nep-cta and nep-hrm
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Citations: View citations in EconPapers (3)

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Journal Article: Theoretical Foundations of Relational Incentive Contracts (2021)
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