This paper studies an infinite-horizon repeated moral hazard problem where a single principal employs several agents. We assume that the principal cannot observe the agents’ effort choices; however, agents can observe each other and can be contractually required to make observation reports to the principal. Observation reports, if truthful, can serve as a monitoring instrument to discipline the...

There is a long tradition in economics about the question of whether intergenerational discounting is fair or not. Ramsey (1928) was the first economist that criticized the discounting and mentioned that the just rate of discounting is zero.  In this paper it was tried to calculate the just rate of discounting for Iran with respect to Islamic thoughts. According to Islam, intergenerational just...

T This paper analyzes different pricing strategies in a two-echelon supply chain including one supplier and two retailers. The supplier and the retailers face random yield and random demand, respectively. Moreover, coordination or non-coordination of retailers in receiving the discount is investigated. Game theory is used to model and analyze the problems. The supplier as a leader of Stackelbe...

In this entry we characterize pricing kernels or stochastic discount factors that are used to represent valuation operators in dynamic stochastic economies. A kernel is commonlyused mathematical term used to represent an operator. The term stochastic discount factor extends concepts from economics and finance to include adjustments for risk. As we will see, there is a tight connection between t...

This paper develops and studies a tough love model of intergenerational altruism. We model tough love by modifying the Barro-Becker standard altruism model in two ways. First, the child’s discount factor is endogenously determined, so that low consumption at young age leads to a higher discount factor later in her life. Second, the parent evaluates the child’s lifetime utility with a constant h...

In contrast to the existing literature on repeated games that assumes a Þxed discount factor, I study an environment in which it is more realistic to assume a ßuctuating discount factor. In a repeated oligopoly, as the interest rate changes, so too does the degree to which Þrms discount the future. I characterize the optimal tacit collusion equilibrium when the discount factor changes over time...