On Modes of Economic Governance

  title={On Modes of Economic Governance},
  author={Avinash Dixit},
I consider transactions involving asymmetric prisoners’ dilemmas between pairs of players selected chosen from two large populations. Games are played repeatedly, but information about cheating is not adequate to sustain cooperation, and there is no official legal system of contract enforcement. I examine how profitmaximizing private intermediation can supply the information and enforcement. I obtain conditions under which private governance can improve upon no governance, and examine why it… CONTINUE READING
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