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Games Played Through Agents

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Author Info
Andrea Prat
Aldo Rustichini

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Abstract

We introduce a game of complete information with multiple principals and multiple common agents. Each agent makes a decision that can affect the payoffs of all principals. Each principal offers monetary transfers to each agent conditional on the action taken by the agent. We characterize pure-strategy equilibria and we provide conditions-in terms of game balancedness-for the existence of an equilibrium with an efficient outcome. Games played through agents display a type of strategic inefficiency that is absent when either there is a unique principal or there is a unique agent. Copyright The Econometric Society 2003.

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Publisher Info
Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 71 (2003)
Issue (Month): 4 (07)
Pages: 989-1026
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Handle: RePEc:ecm:emetrp:v:71:y:2003:i:4:p:989-1026

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