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Competing mechanism games of moral hazard: communication and robustness

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  • Andrea Attar

    ()

  • Eloisa Campioni

    ()

  • Gwenaël Piaser

    ()

  • Uday Rajan

    ()

Abstract

We consider multiple-principal multiple-agent models of moral hazard: principals compete through mechanisms in the presence of agents who take unobservable actions. In this context, we provide a rationale for restricting principals to make use of simple mechanisms, which correspond to direct mechanisms in the standard framework of Myerson (J Math Econ 10:67–81, 1982 ). Our results complement those of Han (J Econ Theory 137(1):610–626, 2007 ) who analyzes a complete information setting where agents’ actions are fully contractible. Copyright Springer-Verlag 2012

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Bibliographic Info

Article provided by Springer in its journal Review of Economic Design.

Volume (Year): 16 (2012)
Issue (Month): 4 (December)
Pages: 283-296

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Handle: RePEc:spr:reecde:v:16:y:2012:i:4:p:283-296

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Related research

Keywords: Moral hazard; Multiple-principal multiple-agent; Simple mechanisms; D82; D86;

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References

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  1. Michael Peters, 1999. "Common Agency and the Revelation Principle," Working Papers peters-99-01, University of Toronto, Department of Economics.
  2. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March.
  3. Takuro Yamashita, 2010. "Mechanism Games With Multiple Principals and Three or More Agents," Econometrica, Econometric Society, vol. 78(2), pages 791-801, 03.
  4. Andrea Attar & Arnold Chassagnon, 2006. "On moral hazard and nonexclusive contracts," PSE Working Papers halshs-00589101, HAL.
  5. Alessandro Pavan & Giacomo Calzolari, 2010. "Truthful Revelation Mechanisms for Simultaneous Common Agency Games," American Economic Journal: Microeconomics, American Economic Association, vol. 2(2), pages 132-90, May.
  6. Michael Peters, 2000. "Negotiation and Take it or Leave it in Common Agency," Working Papers peters-00-02, University of Toronto, Department of Economics.
  7. David Martimort & Lars Stole, 2001. "The Revelation and Delegation Principles in Common Agency Games," CESifo Working Paper Series 575, CESifo Group Munich.
  8. Christine A. Parlour & Uday Rajan, 2001. "Competition in Loan Contracts," American Economic Review, American Economic Association, vol. 91(5), pages 1311-1328, December.
  9. Alberto Bisin & Danilo Guaitoli, 1998. "Moral hazard and non-exclusive contracts," Economics Working Papers 345, Department of Economics and Business, Universitat Pompeu Fabra.
  10. Epstein, Larry G. & Peters, Michael, 1999. "A Revelation Principle for Competing Mechanisms," Journal of Economic Theory, Elsevier, vol. 88(1), pages 119-160, September.
  11. Andrea Attar & Eloisa Campioni & Gwenael Piaser, 2011. "Information Revelation in Competing Mechanism Games," CEIS Research Paper 205, Tor Vergata University, CEIS, revised 04 Jul 2011.
  12. Attar, Andrea & Campioni, Eloisa & Piaser, Gwenaël & Rajan, Uday, 2010. "On multiple-principal multiple-agent models of moral hazard," Games and Economic Behavior, Elsevier, vol. 68(1), pages 376-380, January.
  13. Han, Seungjin, 2004. "Menu Theorems for Bilateral Contracting," Microeconomics.ca working papers han-04-01-29-10-05-13, Vancouver School of Economics, revised 29 Jan 2004.
  14. McAfee, R Preston, 1993. "Mechanism Design by Competing Sellers," Econometrica, Econometric Society, vol. 61(6), pages 1281-1312, November.
  15. Peters, Michael & Troncoso-Valverde, Cristian, 2010. "A Folk Theorem for Competing Mechanisms," Microeconomics.ca working papers michael_peters-2010-17, Vancouver School of Economics, revised 19 Oct 2013.
  16. Han, Seungjin, 2007. "Strongly robust equilibrium and competing-mechanism games," Journal of Economic Theory, Elsevier, vol. 137(1), pages 610-626, November.
  17. Myerson, Roger B., 1982. "Optimal coordination mechanisms in generalized principal-agent problems," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 67-81, June.
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Cited by:
  1. Andrea Attar & Eloisa Campioni & Gwenael Piaser, 2011. "Competing Mechanisms, Exclusive Clauses and the Revelation Principle," CEIS Research Paper 201, Tor Vergata University, CEIS, revised 30 Jun 2011.

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