Abstract
We consider a situation in which a principal hires two agents whose cooperation is technically profitable and study three models that incorporate different assumptions about the agents' cooperative behavior. We find a close relationship between the agents' commitment capacity and the characteristics of the optimal contract. A greater capacity to cooperate leads to more efficient outcomes. We also show that unless agents form a team, the efficient level of mutual help is not achieved in equilibrium. © 1993.
Original language | English |
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Pages (from-to) | 73-100 |
Journal | International Journal of Industrial Organization |
Volume | 11 |
DOIs | |
Publication status | Published - 1 Jan 1993 |