Performance and turnover in a stochastic partnership
Publication
, Journal Article
McAdams, D
Published in: American Economic Journal: Microeconomics
November 1, 2011
Suppose that players in a stochastic partnership have the option to quit and rematch anonymously. If stage-game payoffs are subject to a persistent initial shock, the (unique) social welfare-maximizing equilibrium induces a "dating" process in which all partners enjoy the full potential equilibrium gains from each match. By contrast, maximizing social welfare in non-stochastic repeated games with rematching requires that players burn money or otherwise fail to realize all potential equilibrium gains. Comparative statics on welfare and turnover are also provided, consistent with documented patterns of "survivorship bias" and "honeymoon".
Duke Scholars
Published In
American Economic Journal: Microeconomics
DOI
EISSN
1945-7685
ISSN
1945-7669
Publication Date
November 1, 2011
Volume
3
Issue
4
Start / End Page
107 / 142
Related Subject Headings
- 3803 Economic theory
- 3801 Applied economics
- 3502 Banking, finance and investment
- 14 Economics
Citation
APA
Chicago
ICMJE
MLA
NLM
McAdams, D. (2011). Performance and turnover in a stochastic partnership. American Economic Journal: Microeconomics, 3(4), 107–142. https://doi.org/10.1257/mic.3.4.107
McAdams, D. “Performance and turnover in a stochastic partnership.” American Economic Journal: Microeconomics 3, no. 4 (November 1, 2011): 107–42. https://doi.org/10.1257/mic.3.4.107.
McAdams D. Performance and turnover in a stochastic partnership. American Economic Journal: Microeconomics. 2011 Nov 1;3(4):107–42.
McAdams, D. “Performance and turnover in a stochastic partnership.” American Economic Journal: Microeconomics, vol. 3, no. 4, Nov. 2011, pp. 107–42. Scopus, doi:10.1257/mic.3.4.107.
McAdams D. Performance and turnover in a stochastic partnership. American Economic Journal: Microeconomics. 2011 Nov 1;3(4):107–142.
Published In
American Economic Journal: Microeconomics
DOI
EISSN
1945-7685
ISSN
1945-7669
Publication Date
November 1, 2011
Volume
3
Issue
4
Start / End Page
107 / 142
Related Subject Headings
- 3803 Economic theory
- 3801 Applied economics
- 3502 Banking, finance and investment
- 14 Economics