First, this paper claims that the soft budget constraint is a contradiction in terms by showing that each "soft" budget line is in fact an incorrect one. By classifying the problems that were formerly conglomerated under the name of the "soft budget constraint," we show that a "hard" budget...

An important form of commitment is the ability to restrict the set of future actions from which choices can be made. We study a simple dynamic game of complete information which incorporates this type of commitment. For a given initial game, the players engage in an endogenously determined...