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Standards of behavior and time generate tacit cooperation in hierarchical relationship

Author

Listed:
  • Jean-Pierre Ponssard

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

  • Francis Kramarz

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper provides a game theoritic rationale for the use of standards of behavior in hierarchies. lt proves that the common knowledge of such standards in a long term relationship generates tacit cooperation as long as the time horizon is far enough and that intermediary observations are feasible. Though mathematically similar to the well known equation effect it is argued that the observed result is more robust with respect to the players incentive to view their relationship through such a formalization.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Jean-Pierre Ponssard & Francis Kramarz, 1992. "Standards of behavior and time generate tacit cooperation in hierarchical relationship," Post-Print hal-00363941, HAL.
    • Handle: RePEc:hal:journl:hal-00363941
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