Contractual Matching of Finite Economy

• 발행기관: 한국계량경제학회
• 저자명: Joon Song
• 간행물 정보: 『JOURNAL OF ECONOMIC THEORY AND ECONOMETRICS』Vol.22 No.2, 93~122쪽, 전체 30쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2011.06.30

영문 초록

This paper considers incentive-constrained efficient contractual matching of individuals in the presence of moral hazard. By considering an economy with finite number of individuals, this paper shows what were assumed away in continuum models. Contract arbitrageurs specializing in writing (randomized) contracts, insurers, a market for lotteries on contracts, Lindahl-like prices for the lotteries, and a public randomization device are required for the incentive-constrained efficiency. The public randomization device needs to coordinate the matchings of individuals, and each team’s contract is dependent on other firms’ outputs. Insurers are committed to avoid cream-skimming, and essentially cross-subsidize across teams. This unrealistic role of the insurers shows the impossibility of decentralization in a reasonable sense (even when economics agents are price takers). Applications in Labor economics and Theory of merger are discussed. Technical contribution is to formulate a finite economy by linear programming.

목차

Abstract

1. Introduction

2. The model

3. Conclusion

References

키워드

General equilibrium Team Finite economy Duality of linear programming