Arbitration and Renegotiation in Trade Agreements

Robert A. Becker () and Juan Pablo Rincón-Zapatero ()
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Robert A. Becker: Indiana University
Juan Pablo Rincón-Zapatero: Univesidad Carlos III de Madrid

No 2017-007, CAEPR Working Papers from Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington

Abstract: We reconsider the theory of Thompson aggregators proposed by Marinacci and Montrucchio. First, we prove a variant of their Recovery Theorem estabilishing the existence of extremal solutions to the Koopmans equation. Our approach applies the constructive Tarski-Kantorovich Fixed Point Theorem rather than the nonconstructive Tarski Theorem employed in their paper. We verify the Koopmans operator has the order continuity property that underlies invoking Tarski-Kantorovich. Then, under more restrictive conditions, we demonstrate there is a unique solution to the Koopmans equation. Our proof is based on $u_{0}-$ concave operator techniques as first developed by Kransosels'kii. This differs from Marinacci and Montrucchio's proof as well as proofs given by Martins-da-Rocha and Vailakis.

Keywords: Recursive Utility; Thompson Aggregators; Koopmans Equation; Extremal Solutions; Concave Operator Theory (search for similar items in EconPapers)
JEL-codes: D10 D15 D50 E21 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2017-07
New Economics Papers: this item is included in nep-int and nep-upt
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