A Negishi Approach to Recursive Contracts

In this paper we argue that a large class of recursive contracts can be studied by means the conventional Negishi method. A planner is responsible for prescribing current actions along with distribution future utility values to all agents, so as maximize their weighted sum utilities. Under convexity method yields exact efficient frontier. Otherwise implementation re- quires contingent on publicly observable random signals uncorrelated fundamentals. We compare our approach dual established in literature. Finally, considering maxmin-type social welfare functions, clarify dynamics ex- pressed stochastic evolution shares.