On multiple-principal multiple-agent models of moral hazard
AbstractWe provide two examples in a pure moral hazard setting with two principals and two agents. Example 1 shows that a strongly robust equilibrium in simple (direct) mechanisms can no longer be sustained as an equilibrium when a principal can deviate to an indirect communication scheme. Conversely, an equilibrium with one principal offering an indirect mechanism cannot be replicated as an equilibrium in simple mechanisms. Example 2 shows more directly that a payoff profile that can be achieved in equilibrium when one principal offers an indirect mechanism cannot be achieved as an equilibrium profile in simple mechanisms.
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Bibliographic InfoArticle provided by Elsevier in its journal Games and Economic Behavior.
Volume (Year): 68 (2010)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/inca/622836
Moral hazard Multiple principals Multiple agents Simple mechanisms;
Other versions of this item:
- Andrea Attar & Eloisa Campioni & Gwenaël Piaser & Uday Rajan, 2007. "On multiple-principal multiple-agent models of moral hazard," LSF Research Working Paper Series 07-01, Luxembourg School of Finance, University of Luxembourg.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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