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| Catarina Goulão and Luca Panaccione |
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| ''Pooling promises with moral hazard'' |
| ( 2015, Vol. 35 No.1 ) |
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| We extend the framework of Dubey and Geanakoplos (2002) to the case of moral hazard. We analyze the equilibrium properties of the model and we show that equal ex-ante consumers may choose to promise differently, and, as a consequence, choose different actions. This illustrates how the pool of voluntary promises can induce redistribution from consumers with high expected endowment to those with low expected endowment. |
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| Keywords: moral hazard, pool of promises |
JEL: D3 - Distribution: General
D8 - Information, Knowledge, and Uncertainty: General |
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| Manuscript Received : Feb 05 2014 | | Manuscript Accepted : Mar 11 2015 |
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