
	Where results make sense

Topic: Contract curve

Related Topics

Isoquant

List of economics topics

Edgeworth box

List of publications in economics

Economics

Welfare economics

Social welfare function

Francis Edgeworth

Pareto efficiency

Microeconomics

Homo economicus

Opportunity cost

Pareto

Economies of scope

Production possibility frontier

In the News (Fri 11 Dec 09)

Northern Trust

Marvin Harrison

Peter Chernin

Gary Locke

Match Play

Penelope Cruz

Mickey Rourke

AR Rahman

Danny Boyle

Hugh Jackman

	Monopoly Pricing and Contracts
		We can see this result intuitively in Figure 1 (we have omitted the autarky indifference curves to avoid cluttering, but the entire core is still represented by the thick fl line segment on the contract curve).
		This would allow him to be a "perfectly-discriminating" monopolist: he could, via a fully specified contract, drive the other trader back to his autarky indifference curve, and take all the gains-from-trade for himself.
		Note that, necessarily, the final outcome of such a case would be on the contract curve, and thus Pareto-efficient.
	cepa.newschool.edu /het/essays/edgew/edgemonop.htm (910 words)

	eh08.html
		Hence their indifference curves must be tangential at that point - and hence that point lies on the contract curve.
		the contract curve - and hence is inefficient.
		Any Point on Contract Curve can be reached through competitive trading from some (or many) initial endowment point (as long as the preferences are convex).
	www-users.york.ac.uk /~jdh1/micro2/handouts/eh081.html (1000 words)

	[No title]
		It is clear that by moving away form the demand curve both the firm as well as the union can improve their utility and profit without affecting the other.
		Strongly Efficient contracts If the contract curve PZ is vertical then the firm hires same number of workers, as it would have hired in the absence of unions.
		The resistance curve is downward sloping as the longer the duration the lower the wage the union will be willing to accept till a bare minimum wmin The firm chooses the lowest isoprofit curve that is tangent to the reaction curve - point P Thus the firm chooses the strike duration that maximizes its profit.
	web.syr.edu /~ankumar/teaching/unions.doc (1484 words)

	Edgeworth's "Indeterminacy of Contract"
		Thus contracts C and D are "Pareto-superior" to contract F. However, note that from point F, one cannot obtain agreement to move to either A or B. Thus, neither A nor B are "Pareto-comparable" to contract F. Fig.
		The modern custom is to call the entire locus the "contract curve" (as Edgeworth initially did, although he then wavered on this) and refer to the part within the lens merely as "the core" (as we shall see later).
		As the contract curve is the set of all Pareto-optimal points, this amounts to merely proving that all allocations in the core are Pareto-optimal.
	homepage.newschool.edu /~het/essays/edgew/edgecore.htm (4509 words)

	Determinacy Restored
		It is important to note that at the Walrasian equilibrium, the allocation C is in the Edgeworthian core (denoted by the thick portion of the contract curve).
		This only happens on the contract curve -- and, as we saw earlier, for a two-person economy, the portion of the contract curve within the lens is the Edgeworthian core.
		The utility combinations attained in the area of the "lens" formed by the autarky indifference curves in the box diagram is represented in the UPF by the darkly shaded area in Figure 5.
	cepa.newschool.edu /het/essays/edgew/edgedeter.htm (3926 words)

	[No title] (Site not responding. Last check: 2007-09-06)
		The contract curve is the locus of all allocations of x1 and x2 such that the indifference curves of Alice are tangential to those of the Bobs.
		The marginal benefit (MB) curve for the consumption of health care is downward sloping and the actual quantity of health care consumed occurs where the MB curve crosses the MC curve (at xP).
		The marginal benefit (MB) curve for the consumption of health care is downward sloping and the actual quantity of health care consumed occurs where the MB curve crosses the MC curve.
	www.staff.city.ac.uk /~sm02571/wetopic9.doc (2767 words)

	[No title]
		Insight: At the tangency of union indifference curve to the demand for labor constraint, the union indifference curve has a negative slope.
		Contract curve characterized by: EMBED Equation.DSMT4 We can cancel out the employment levels in the denominators of both sides (as well as eliminate the minus signs): EMBED Equation.DSMT4 First we note that EMBED Equation.DSMT4 (if the union is to be any good at all for its workers).
		Thus we have a push-me/pull-you of offsetting effects on the contract curve.
	www.wiwiss.fu-berlin.de /w3/w3collie/Labor02/McDonaldSolow.doc (1743 words)

	Homework problems
		There exists, of course, a chance that equal allocation is optimal: it is when the endowments of bread are such that the allocation point lies at the intersection of the contract curve and the dotted line, but the probability is negligible and the guys can reach it through exchange anyway, if they want.
		The original optimal choice for the individual with the preferences rendered by the indifference curves in the diagram above is at point A. Once she starts receiving housing assistance, she chooses to have more (better, more expensive) housing and somewhat less other goods (point B).
		Her utility would increase by the same proportion (the same indifference curve reached) but a lower cost for the society: $600-$500 = $100 net gain.
	www.uh.edu /~vlazarev/3377/Review1.htm (1862 words)

	[No title] (Site not responding. Last check: 2007-09-06)
		The contract curve is the set of points where the indifference curves of the two individuals are tangential.
		The MRS is equal to the (negative) slope of the indifference curves, and if two curves are tangent at a point, their slopes are also equal at that point.
		It is the intersection of the production contract curve and a line passing through the initial allocation with a slope equal to the ratio of prices.
	www.msu.edu /course/ec/301/Matraves/H9Answers.doc (610 words)

	ECON 270 (Site not responding. Last check: 2007-09-06)
		Use a production possibilities frontier and a community indifference curve mapping to show that an increase in a country's terms of trade can either increase or decrease its exports.
		Show how trade indifference curves can be derived from a country's production possibilities frontier and community indifference curve mapping.
		Use a contract curve similar to figure 15 to show that trade leads to a Pareto-optimum distribution of goods.
	www.csuchico.edu /~rjames/class/econ270/review/review_2.htm (389 words)

	Section3.htm
		Thus curve is often referred to as the contract curve.
		The reason is that as long as consumers are off the curve, they have an incentive to renegotiate a further exchange.
		Once on the curve there is no further contract which both would agree to without coercion.
	www.econ.ucla.edu /riley/201/web/Section3.htm (587 words)

	[No title]
		This approach would be preferable to Ernie because he would be at a higher level of satisfaction, i.e, farther out from his origin and on a higher indifference curve.
		So, Bert wants to drive Ernie down his indifference curve and Ernie wants to drive Bert down his indifference curve until they wind up on the contract curve, where no more trades can make one person better off (on a higher indifference) with making the other person worse off — a Pareto Optimum.
		But, in fact, they likely end up on the contract curve somewhere in between these two extreme points — where that is depends on who is the better negotiator.
	www.vermontel.net /~hancockp/HWhelp1.doc (539 words)

	CME Rulebook - Options on Three-month Eurodollar Futures (Site not responding. Last check: 2007-09-06)
		For purposes of this rule, the primary futures contract shall be defined as the futures contract trading in the lead month configuration in the pit.
		Options trading for contracts not in the March quarterly cycle except for those Mid-Curve options specified in Paragraph 3 and those 5-Year bundle options specified in Paragraph 4, shall terminate at the close of trading on the Friday preceding the third Wednesday of the contract month.
		Specifications shall be fixed as of the first day of trading of a contract except that all options must conform to government regulations in force at the time of exercise.
	rulebook.cme.com /rulebook11118.html (3689 words)

	[No title]
		The allocations where the two agents' indifference curves are tangent to each other are of particular interest: these points form the contract curve.
		If we start from an allocation not on the contract curve, say point e (see figure 7, lecture 11) we know that there are points that make both parties better off (see shaded area).
		As prices change, Joe's offer curve is initially the point of tangency with the upper bump (point b), and as prices continue to change points of tangency with the lower bump (points e and f) determine the offer curve.
	socrates.berkeley.edu /~sgoldman/101a/Lectures/Docs/19.doc (3195 words)

	Edgeworth's Box (Site not responding. Last check: 2007-09-06)
		B Crusoe is better off (moving from indifference curve IC to IC') while Friday is no worse off (he stays on the same indifference curve).
		Points on the contract curve are efficient while points off the contract curve are inefficient.
		Even though points on the contract curve are efficient, it is not necessarily the case that any point on the contract curve is better than a given point off the contract curve.
	www.louisville.edu /~bmhawo01/econpage/341/handouts/edgeworth.html (683 words)

	Microeconomics and Behaviour \| Chapter Outline
		Pareto optimality and a location on the contract curve results when exchange cannot improve one person’s position without reducing that of the other person.
		The location on the contract curve, although efficient, may not be fair if the initial endowments were not equitable.
		The contract curve of production is efficient because one firm could not increase its output without the other firm losing output.
	highered.mcgraw-hill.com /sites/0070889708/student_view0/chapter16/chapter_outline.html (486 words)

	Feature - A Short Course in Parametric Calibration
		We had a contract to produce a quantity of reflector panels that would be mounted together to form a parabolic dish.
		The total curve we were cutting was actually 3mm longer than it would be in service and, therefore is a significant correction.
		The result is a near perfect positioning of the cutter to the contract curve in air.
	www.mmsonline.com /articles/029710.html (3290 words)

	Econ315, Soln Chpt 11-12, Solberg (Site not responding. Last check: 2007-09-06)
		When observed costs are used to estimate the cost curve, the estimate of the level of cost is biased upwards.
		Along this contract curve, a doubling of X will halve the output of Y when returns to scale are constant.
		Along this contract curve, when there are decreasing returns to scale, a doubling of X will lead to a less than halving of Y.
	business.fullerton.edu /economics/esolberg/Econ_315/S11_12.htm (2358 words)

	Budget Line
		Each curve, by itself, represents a set of combinations of goods A and B that would be equally satisfying to the consumer as any other point on the curve
		The point at which the indifference curve of each individual is tangent to each other is the Pareto Optimal point for these two consumers.
		The Contract Curve: represents all of the back-to-back tangency points of the indifference curves that can be drawn for each of the two consumers.
	www.clas.ufl.edu /users/rjohnson/Graduate_Policy_Analysis/Budget_Line.htm (358 words)

	UCLA; Economics 134A; Cameron; Practice Exam Questions (Site not responding. Last check: 2007-09-06)
		Likewise, any point on the contract curve is efficient, but some of those points involve one person having almost everything and the other person having next to nothing.
		You have an equilibrium if both consumers are individually utility-maximizing so that their indifference curves are just tangent to their budget constraints.
		Economists prefer to use the Hicksian-compensated demand curve for welfare analysis, although we often have to settle for an approximation based on the Marshallian demand curve (which can be somewhat biased).
	www.sscnet.ucla.edu /ssc/labs/cameron/e134s01/e134px4_ans.htm (502 words)

	Contract curve - Wikipedia, the free encyclopedia
		A contract curve is the set of all points in an Edgeworth box that achieve Pareto efficiency.
		A contract curve is the same as a Pareto set.
		See welfare economics and list of economics topics.
	en.wikipedia.org /wiki/Contract_curve (69 words)

	Restricted Cores
		The regular core is represented by the segment of the contract curve between the two autarky indifference curves, namely the thick line stretching from C to D in Figure 1.
		Thus the set of core allocations will be strictly the contract curve segment between C and D. Fig.
		In Figure 2, the core with two Robinsons and two Fridays is represented by the contract curve segment between F and G. This is because allocations such as C and D can now be blocked by three traders (e.g.
	homepage.newschool.edu /het/essays/edgew/epsicore.htm (1745 words)

	Email a Friend
		It is shown that when the contract curve is given, greater union bargaining power raises the wage share.
		We argue, however, that the factors that strengthen the bargaining power of unions are likely to induce offsetting shifts in the contract curve.
		A simulation exercise indicates that the shift in the contract curve is likely to be of secondary importance in determining the wage share.
	www.cepr.org /home/cite.asp?Type=DP&Item=288 (140 words)

	[No title]
		Since the points on the contract curve are points of tangency of the two isoquants, we have EMBED Equation.2 .
		Therefore, points on the PPF correspond to points along the contract curve (however, there may be certain circumstances under which points on the contract curve do not correspond to points on the PPF).
		To divide the bundle efficiently, we know that we have to be at some point on the contract curve such as point B. We say that an allocation is Pareto optimal if any other allocation which makes one person better off makes another worse off.
	socrates.berkeley.edu /~sgoldman/101a/Lectures/Docs/21.doc (1839 words)

	Lecture 8 – Econ 2G03/2X03 Section 3 – Neil Buckley (Site not responding. Last check: 2007-09-06)
		All the indifference curves in the diagram are the regular smooth and convex shape.
		Their contracting activity will only end when they end up at an allocation on the line segment DE, when there is no possible exchange agreement that could make both people better off.
		Notice how the Pareto-optimal set of points (the bolded contract curve) does not always occur when the MRS’s are equal when we allow for non-essential and non-convex preferences.
	socserv2.socsci.mcmaster.ca /nbuckley/2gg3/lectures/slides6-ch13.htm (3129 words)

	software - contract management software - contract curve (Site not responding. Last check: 2007-09-06)
		New Eurodollar Weekly Mid Curve options contract to be added on Oct 03, 2005: Week 1 Nov 2005 E0X5W1 11/04/05 11/04/05 11/07/05 New Eurodollar Weekly Mid Curve options contract to be added on Oct 10, 2005:...
		Once a fair value curve is built, Futures Prices and FRA Rates for daily Futures Contracts are calculated...
		DCAA Contract Audit Manual (CAM) DCAAM 7640.1 This manual is available to the public on an indefinite...
	www.jttheodore.com /contracts/software/contract-curve.html (692 words)

	Name_________________________
		C) Rita and Joe are on the contract curve.
		B) the vertical difference between the market demand curve and the supply curve of the fringe firms.
		C) the demand curve left for the fringe firms after the dominant firm has determined an output level.
	www.csus.edu /indiv/k/kerbyw/sample_midterm_3a2.htm (1112 words)

	Microeconomics and Behaviour \| Quick Quiz
		If Anita and Roberta are on the contract curve, there is no possibility for any more voluntary exchanges between the two.
		Which point on the contract curve is reached depends a great deal on the initial endowment of the commodities and the comparative bargaining power of the individuals involved.
		The ideal point on the contract curve is the midpoint, where output of each good is the same.
	highered.mcgraw-hill.com /sites/0070889708/student_view0/chapter16/quick_quiz.html (626 words)

	Lecture 8 – Econ 2G03/2X03 Section 3 – Neil Buckley (Site not responding. Last check: 2007-09-06)
		This must be negatively sloped since as one isoquant increases along the contract curve, the isoquant for the other good must decrease.
		The points below the curve represent all of the inefficient resource allocations (points like ‘A’ from the previous diagram) and points above the curve are not possible in the economy.
		Also when production functions for the two goods are identical and homothetic then the production contract curve will be a straight line between the corners of the Edgeworth production box, just like in the standard exchange economy case.
	socserv2.socsci.mcmaster.ca /nbuckley/2gg3/lectures/slides7-ch13.htm (2492 words)

	[No title] (Site not responding. Last check: 2007-09-06)
		The contract curve is determined by solving the equation defining the
		The allocations on this portion of the contract curve are called
		Hence, mapping the contract curve on the U1-U2-plane determines the
	www.georgetown.edu /faculty/poiriere/micro/lessons/lesson10.html (1139 words)

Try your search on: Qwika (all wikis)