A note on the take-it-or-leave-it bargaining procedure with double moral hazard and risk neutrality - Archive ouverte HAL Access content directly
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A note on the take-it-or-leave-it bargaining procedure with double moral hazard and risk neutrality

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Abstract

In this note we study a take-it-or-leave-it bargaining procedure between two risk neutral individuals engaged in the joint stochastic production of a commodity. Each individual has to exert effort, that is, to provide a one-dimensional input which is unobserved to the other individual. The output-contingent sharing rule is constrained to lead to nonnegative consumption for both individuals, a limited liability constraint. The individuals enter joint production in one of two possible occupations, or tasks, the p-agent and the a-agent, which differ in their incentive intensity. Hence, incentives are asymmetric. The p-agent makes a take-it-or-leave-it offer to the a-agent, and has therefore all the contractual power, modulo providing the a-agent an exogenously given reservation utility.
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Dates and versions

hal-00593380 , version 1 (14-05-2011)

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  • HAL Id : hal-00593380 , version 1

Cite

Alessandro Citanna. A note on the take-it-or-leave-it bargaining procedure with double moral hazard and risk neutrality. 2003. ⟨hal-00593380⟩

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