Summary. A principal and an agent enter into a sequence of agreements. The principal faces an interim participation constraint at each date, but can commit to the current agreement; in contrast, the agent has the opportunity to renege on the current agreement. We show that every constrained efficient sequence must, after a finite number of dates, exhibit a continuation that maximizes the agent’s payoff over all such sequences.
Summary. The paper develops a concept of equilibrium behaviour in a model of nonpaternalistic intergenerational altruism. When each generation’s utility depends on that of at least two successors, equilibria may be inefficient.