Citation

Discussion Paper Details

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Title: Flexible Integration as an Efficient Decision-Making Rule

Author(s): Mika Widgrén

Publication Date: August 1999

Keyword(s): Incomplete Contracts, Integration, Legislative Bargaining and Non-Cooperative Games

Programme Area(s): International Macroeconomics and International Trade and Regional Economics

Abstract: In this paper we combine a non-cooperative decision-making game in a federal structure with two levels of interest and an incomplete contract which sets the rules of the game. The question we pose is how to combine ex ante efficiency of the design with ex post efficiency of the outcomes in the decision-making game. The paper shows that in common policies there are no designs that lead to both types of efficiency but flexible integration is a way to achieve both.

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Bibliographic Reference

Widgrén, M. 1999. 'Flexible Integration as an Efficient Decision-Making Rule'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2207