Conventional contracts
A conventional contract is a contract that each side of a bargain expects the other side to insist on, because it is standard and customary under the circumstances. The author considers a process of convention formation in which agents expectations evolve through repeated interactions in a large-pop...
| Main Author: | |
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| Format: | Journal article |
| Language: | English |
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Wiley
1998
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| _version_ | 1797105578894426112 |
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| author | Young, H |
| author_facet | Young, H |
| author_sort | Young, H |
| collection | OXFORD |
| description | A conventional contract is a contract that each side of a bargain expects the other side to insist on, because it is standard and customary under the circumstances. The author considers a process of convention formation in which agents expectations evolve through repeated interactions in a large-population setting. Agents choose best replies given their knowledge of the precedents, subject to some inertia and random error in their choice behavior. Over the long run, this adaptive learning process tends to select contracts that are efficient, and egalitarian in the sense that the payoffs are centrally located on the efficiency frontier of the payoff possibility set. When the payoffs form a convex, comprehensive bargaining set, the process selects the Kalai-Smorodinsky solution. |
| first_indexed | 2024-03-07T06:49:24Z |
| format | Journal article |
| id | oxford-uuid:fc01e708-71c0-4ee2-9345-0f5a3839bd9e |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T06:49:24Z |
| publishDate | 1998 |
| publisher | Wiley |
| record_format | dspace |
| spelling | oxford-uuid:fc01e708-71c0-4ee2-9345-0f5a3839bd9e2022-03-27T13:17:47ZConventional contractsJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:fc01e708-71c0-4ee2-9345-0f5a3839bd9eEnglishDepartment of Economics - ePrintsWiley1998Young, HA conventional contract is a contract that each side of a bargain expects the other side to insist on, because it is standard and customary under the circumstances. The author considers a process of convention formation in which agents expectations evolve through repeated interactions in a large-population setting. Agents choose best replies given their knowledge of the precedents, subject to some inertia and random error in their choice behavior. Over the long run, this adaptive learning process tends to select contracts that are efficient, and egalitarian in the sense that the payoffs are centrally located on the efficiency frontier of the payoff possibility set. When the payoffs form a convex, comprehensive bargaining set, the process selects the Kalai-Smorodinsky solution. |
| spellingShingle | Young, H Conventional contracts |
| title | Conventional contracts |
| title_full | Conventional contracts |
| title_fullStr | Conventional contracts |
| title_full_unstemmed | Conventional contracts |
| title_short | Conventional contracts |
| title_sort | conventional contracts |
| work_keys_str_mv | AT youngh conventionalcontracts |