Econometric Society 57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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NETWORKS OF RELATIONS


Category: Economic Theory
Networks I
Monday 26th August 2002, 09:30 - 11:00, Room: 4.6
Session Chair(s): Andrea Galeotti, Tinbergen Institute-Erasmus University, NETHERLANDS

Presenter(s): Lippert, Steffen

Co-Author(s): Spagnolo, Giancarlo

Keyword(s): Collusion, Networks, Relational Contracts, Social Capital

JEL(s): D23, D43, L13, L29, O17

Abstract:

We explore sanctioning power within a network of relational contracts under different information technologies depending on the shape of the network. The value of the relational network lies in the enforcement of cooperative agreements which would not be enforceable for the agents without access to the punishment power of other network members. We identify conditions for stability of such networks, conditions for transmission of information about past actions, and conditions under which self-sustainable subnetworks may actually inhibit a stable network.


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Paper Reference Number: 710

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57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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