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- W2766705917 abstract "We study contracting and costly renegotiation in settings of complete but unverifiable information, using the mechanism-design approach. We show how renegotiation activity is best modelled in the fundamentals of the mechanism-design framework, so that noncontractibility of renegotiation amounts to a constraint on the problem. We formalize and clarify the Renegotiation-Proofness Principle (RPP), which states that any state-contingent payoff vector that is implementable in an environment with renegotiation can also be implemented by a mechanism in which renegotiation does not occur in equilibrium. We observe that the RPP is not generally valid. However, we prove a general monotonicity result that confirms the RPP's renegotiation is bad message. Our monotonicity theorem establishes that the set of implementable state-contingent payoffs increases with the costs of renegotiation." @default.
- W2766705917 created "2017-11-10" @default.
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- W2766705917 date "2002-05-01" @default.
- W2766705917 modified "2023-09-23" @default.
- W2766705917 title "The Renegotiation-Proofness Principle and Costly Renegotiation - eScholarship" @default.
- W2766705917 hasPublicationYear "2002" @default.
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