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Common agency equilibria with discrete mechanisms and discrete types

Martimort, David; Stole, Lars A. - 2001

This paper characterizes the equilibrium sets of an intrinsic common agencygame with discrete types and direct revelation mechanisms. After presentinga general algorithm to find the pure-strategy equilibria of this game, we use itto characterize these equilibria when the two principals control...

Persistent link: https://www.econbiz.de/10011400396

Contractual externalities and common agency equilibria

Martimort, David; Stole, Lars A. - 2001

principals both under complete and asymmetric information. Direct externalities arise when the contracting variable of one …

Persistent link: https://www.econbiz.de/10011400799

Random inspections and periodic reviews : optimal dynamic monitoring

Varas, Felipe; Marinovic, Iván; Skrzypacz, Andrzej - 2018

We study the design of monitoring in dynamic settings with moral hazard. An agent (e.g. a firm) benefits from reputation for quality, and a principal (e.g. a regulator) can learn the agent's quality via costly inspections. Monitoring plays two roles: an incentive role, because outcomes of...

Persistent link: https://www.econbiz.de/10011865082

Rigidity in bilateral trade with holdup

Zhao, Rui R. - In: Theoretical economics : TE ; an open access journal in … 3 (2008) 1, pp. 85-121

This paper studies bilateral trade in which the seller makes a hidden investment that influences the buyer's hidden valuation. In general it is impossible to implement both first-best efficient trade and efficient investment using budget-balanced trading mechanisms. The paper fully characterizes...

Persistent link: https://www.econbiz.de/10011700620

Dynamic contracting : an irrelevance theorem

Eső, Péter; Szentes, Balàzs - In: Theoretical economics : TE ; an open access journal in … 12 (2017) 1, pp. 109-139

This paper generalizes a conceptual insight in dynamic contracting with quasilin- ear payoffs: the principal does not … contract. This is shown in a general model in which the agent’s type stochastically evolves over time, and her payoff (which is … her hidden actions. The contract is offered by the principal in the presence of initial informa- tional asymmetry. The …

Persistent link: https://www.econbiz.de/10011704662

Optimal Contracting Under Adverse Selection : The Implications of Mentalizing

Lenells, Jonatan - 2015

information. This strategy affects the properties of the optimal contract, which grows closer to the first best. This research …

Persistent link: https://www.econbiz.de/10013016072

Inefficiency and regulation in credence goods markets with altruistic experts

Farukh, Razi; Kerkhof, Anna; Loebbing, Jonas - 2020

We study a credence goods problem - that is, a moral hazard problem with non-contractible outcome - where altruistic experts (the agents) care both about their income and the utility of consumers (the principals). Experts' preferences over income and their consumers' utility are convex, such...

Persistent link: https://www.econbiz.de/10012431181

Contractual Externalities and Common Agency Equilibria

Martimort, David; Stole, Lars A. - 2021

principals both under complete and asymmetric information. Direct externalities arise when the contracting variable of one …

Persistent link: https://www.econbiz.de/10013320765

The Revelation and Delegation Principles in Common Agency Games

Martimort, David; Stole, Lars A. - 2021

In the context of common agency adverse-selection games we illustrate that the revelation principle cannot be applied to study equilibria of the multi-principal games. We then demonstrate that an extension of the taxation principle - what we term the delegation principle - can be used to...

Persistent link: https://www.econbiz.de/10013320776

Common Agency Equilibria with Discrete Mechanisms and Discrete Types

Martimort, David; Stole, Lars A. - 2021

This paper characterizes the equilibrium sets of an intrinsic common agency game with discrete types and direct revelation mechanisms. After presenting a general algorithm to find the pure-strategy equilibria of this game, we use it to characterize these equilibria when the two principals...

Persistent link: https://www.econbiz.de/10013320779