On Modes of Economic Governance

By Avinash Dixit. Social Science Research Network, 2001

222 citations recorded by the source corpus.

I consider transactions involving asymmetric prisoners' dilemmas between pairs of players selected 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 profit-maximizing private intermediation can supply the information and enforcement. I obtain conditions under which private governance can improve upon no governance, and examine why it fails to achieve social optimality.

Subfields: Economics and Econometrics, Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/58384446c076ff9df1b50298f0020be276ac89d4

Citations in the corpus

• The interaction effect of relational norms and agent cooperativeness on opportunism in buyer–supplier relationships (2010, unknown): “This contractual or market approach is commonly used in marketing channels as a means to coordinate actions between exchange partners (e.g., Dixit, 2003).”
• Migration and Trade (2012, unknown): “As Rauch (2001) points out, effective networks need not be immigrant or ethnic networks.”
• Commitment, Coercion and Markets: The Nature and Dynamics of Institutions Supporting Exchange (2005, unknown): “Self-governance (in the sense that the responsibility for contract enforcement is placed in the hands of the interacting individuals; e.g., Dixit 2003) and reputation-based institutions (in which one’s current conduct is motivated by fear of losing one’s reputation and hence future gains; e.g.,…”
• Governance Institutions and Economic Activity (2009, unknown): “4; further details in Dixit 2003a).”
• Cooperation among Strangers under the Shadow of the Future (2009, unknown): “(2000) and Duffy and Ochs (2006). In any given period subjects still meet in pairs but after each period new pairs are randomly formed drawing among subjects from a larger economy with more than two subjects.”