Advanced Search
MyIDEAS: Login

Commitments with Third Parties


Author Info

  • Jerry R. GREEN
Registered author(s):


    Observable irrevocable contracts between a principal and an agent have been suggested as a way in which the principal can enhance his payoff when playing a game against, or bargaining with, an opponent. It is shown that such beneficial agency relationships depend on the ability of the principal either to cut off further communication with his own agent or to cut the agent off from the opponent. With full communication, an unrestricted three-player bargaining phase will follow the contracting. In such a two-phase model, it is shown that the principal can never do better by employing an agent than he could have alone. Only contracts that result in either the principal's or the agent's payoffs being non-monotonic in the bargaining share they achieve have any potential to benefit the principal. But these contracts can be turned against him. The opponent can make another contract offer to the agent which, if superimposed on the principal's original contract, will result in an outcome that is actually worse for the principal than the solution of the original two-person problem.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    Download Restriction: no

    Bibliographic Info

    Article provided by ENSAE in its journal Annals of Economics and Statistics.

    Volume (Year): (1992)
    Issue (Month): 25-26 ()
    Pages: 101-121

    as in new window
    Handle: RePEc:adr:anecst:y:1992:i:25-26:p:05

    Contact details of provider:
    Postal: 3, avenue Pierre Larousse, 92245 Malakoff Cedex
    Web page:
    More information through EDIRC

    Related research



    No references listed on IDEAS
    You can help add them by filling out this form.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Samuelson, Larry, 2001. "Introduction to the Evolution of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 225-230, April.
    2. Heifetz, Aviad & Shannon, Chris & Spiegel, Yossi, 2007. "What to maximize if you must," Journal of Economic Theory, Elsevier, vol. 133(1), pages 31-57, March.
    3. Aviad Heifetz & Chris Shannon & Yossi Spiegel, 2007. "The Dynamic Evolution of Preferences," Economic Theory, Springer, vol. 32(2), pages 251-286, August.


    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:adr:anecst:y:1992:i:25-26:p:05. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Robert Gary-Bobo).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.