Demougin, Dominique ORCID: 0000-0002-1744-0390 and Helm, Carsten
(2006)
Moral Hazard and Bargaining Power.
German Economic Review, 7 (4).
pp. 463-470.
Text
BargainingPower[1]-GER.pdf - Author Accepted Manuscript Download (165kB) |
Abstract
<jats:title>Abstract</jats:title> <jats:p> We introduce bargaining power in a moral hazard framework where parties are risk-neutral and the agent is financially constrained. We show that the same contract emerges if the concept of bargaining power is analyzed in either of the following three frameworks: in a standard principal-agent (P-A) framework by varying the agent’s outside opportunity, in an alternating offer game, and in a generalized Nash-bargaining game. However, for sufficiently low levels of the agent’s bargaining power, increasing it marginally does affect the equilibrium in the Nash-bargaining game, but not in the P-A model and in the alternating offer game.</jats:p>
Item Type: | Article |
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Depositing User: | Symplectic Admin |
Date Deposited: | 15 Aug 2016 10:06 |
Last Modified: | 19 Jan 2023 07:32 |
DOI: | 10.1111/j.1468-0475.2006.00130.x |
Related URLs: | |
URI: | https://livrepository.liverpool.ac.uk/id/eprint/3002931 |