Friday, 12 December 2008

Gary D. Libecap and Steven N. Wiggins, (1984),”Contractual Responses to the Common Pool: Prorationing of Crude Oil Production”

This paper is application of game theory and inspection of it. The paper try to describe effect of bargaining cost to institutions, forms of contract.

In conclusion, it shows concentration has positive effect for output, and form of contract. But, like the prisoner’s dilemma, contracts take form of prorationing even if it is costly.

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