‘An Incomplete Contract Approach to Eurozone Fiscal Governance’ – Commitment vs. Flexibility
نویسندگان
چکیده
منابع مشابه
To “ Comment on ‘ Commitment Vs . Flexibility ’ ” (
IN THE APPENDIX of Ambrus and Egorov (2013), the proof of Proposition 3 contained only the idea of proof of the result that w(θp) < z(u(θp)) is possible, so money-burning for high types is possible. Here, we present the complete proof of this fact. Our strategy is to build on Example 1, approximate it with a continuous distribution, and show that, for sufficiently close approximations, the opti...
متن کاملComment on “ Commitment Vs . Flexibility ”
This comment corrects two results in the 2006 Econometrica paper by Amador, Werning, and Angeletos (AWA), that features a model in which individuals face a tradeoff between flexibility and commitment. First, in contrast to Proposition 1 in AWA, we show that money-burning can be part of the ex ante optimal contract when there are two states. Second, in contrast to Proposition 2 in AWA, we show t...
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This paper deals with a special hold-up problem in privatization. Since the enterprise, which is to be privatized, has to be restructured in a situation of uncertainty and the restructuring investments are sunk when the final decision on the sale price is taken in renegotiations, there is an imminent danger that restructuring is not done on an efficient scale, and there is underinvestment. We c...
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A principal faces an agent who is better informed but biased towards higher actions. She chooses whether to audit the agent’s information and his permissible actions. We show that if the audit cost is small enough, a threshold with an escape clause (TEC) is optimal: the agent can select any action below a threshold, or request audit and the efficient action if the threshold is sufficiently bind...
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Soon after the establishment of the Eurozone it became obvious that the structural differences between member countries would not abate, as expected, but rather gradually widen. Although part of the problem can be attributed to the enlargement process, it also relates to asymmetric effects of the common currency and to diverging economic policies. This paper discusses the literature which assoc...
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ژورنال
عنوان ژورنال: International Economic Journal
سال: 2017
ISSN: 1016-8737,1743-517X
DOI: 10.1080/10168737.2017.1315736