IDEAS home Printed from https://ideas.repec.org/a/spr/joecth/v10y1997i2p227-240.html
   My bibliography  Save this article

Competition between asymmetrically informed principals

Author

Listed:
  • Eric W. Bond

    (Department of Economics, The Pennsylvania State University, University Park, PA 16802, USA)

  • Thomas A. Gresik

    (Department of Economics, The Pennsylvania State University, University Park, PA 16802, USA)

Abstract

This paper derives the set of equilibria for common agency games in which the principals compete in piece rates and lump sum payments and one principal has incomplete information about the agent's preferences. We show that the uninformed principal's expected payoff function is discontinuous with respect to the identity of the marginal agent type. This discontinuity is shown to support an open set of equilibria. For games in which the first-best equilibrium strategies are measurable with respect to the uninformed principal's information partition, this result implies the existence of an open set of Pareto inefficient equilibria.

Suggested Citation

  • Eric W. Bond & Thomas A. Gresik, 1997. "Competition between asymmetrically informed principals," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(2), pages 227-240.
    • Handle: RePEc:spr:joecth:v:10:y:1997:i:2:p:227-240
    Note: Received: December 5, 1995; revised version August 18, 1996
    as

    Download full text from publisher

    File URL: http://link.springer.de/link/service/journals/00199/papers/7010002/70100227.pdf
    Download Restriction: Access to the full text of the articles in this series is restricted
    File URL: http://link.springer.de/link/service/journals/00199/papers/7010002/70100227.ps.gz
    Download Restriction: Access to the full text of the articles in this series is restricted
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Mylovanov, Tymofiy & Tröger, Thomas, 2008. "Optimal Auction Design and Irrelevance of Private Information," Bonn Econ Discussion Papers 21/2008, University of Bonn, Bonn Graduate School of Economics (BGSE).
    2. David Martimort & Lars Stole, 2009. "Market participation in delegated and intrinsic common‐agency games," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 78-102, March.
    3. Tröger, Thomas & Mylovanov, Timofiy, 2012. "Mechanism design by an informed principal: the quasi-linear private-values case," Working Papers 12-14, University of Mannheim, Department of Economics.
    4. Diaw, K. & Pouyet, J., 2004. "Competition, Incomplete Discrimination and Versioning," Discussion Paper 2004-69, Tilburg University, Center for Economic Research.
    5. Sengupta, Rajdeep, 2007. "Foreign entry and bank competition," Journal of Financial Economics, Elsevier, vol. 84(2), pages 502-528, May.
    6. Khaled Diaw & Jérôme Pouyet, 2005. "Information, competition and (In) complete discrimination," Working Papers hal-00243025, HAL.
    7. Thomas Troeger & Tymofiy Mylovanov, 2010. "Optimal Auction Design and Irrelevance of Privacy of Information," 2010 Meeting Papers 1039, Society for Economic Dynamics.
    8. Wagner, Christoph & Mylovanov, Tymofiy & Tröger, Thomas, 2015. "Informed-principal problem with moral hazard, risk neutrality, and no limited liability," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 280-289.
    9. Xiaodong Wu, 2000. ""Pollution Havens" and the Regulation of Multinationals by Multiple Governments," Econometric Society World Congress 2000 Contributed Papers 1766, Econometric Society.
    10. Thomas A. Gresik, 2001. "The Taxing Task of Taxing Transnationals," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 800-838, September.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:10:y:1997:i:2:p:227-240. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.