Common Agency and Coordination: General Theory and Application to Government Policy Making
AbstractThe authors develop a model of common agency with complete information and general preferences with nontransferable utility, and they prove that the principals' Nash equilibrium in truthful strategies implements an efficient action. The authors apply this theory to the construction of a positive model of public finance, where organized special interests can lobby the government for consumer and producer taxes or subsidies and targeted lump-sum taxes or transfers. The lobbies use only the nondistorting transfers in their noncooperative equilibrium, but their intergroup competition for transfers turns into a prisoners' dilemma in which the government captures all the gain that is potentially available to the parties. Copyright 1997 by the University of Chicago.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 105 (1997)
Issue (Month): 4 (August)
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Web page: http://www.journals.uchicago.edu/JPE/
Other versions of this item:
- Dixit, Avinash & Grossman, Gene M. & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Scholarly Articles 3450061, Harvard University Department of Economics.
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- Hammond, Peter J, 1979. "Straightforward Individual Incentive Compatibility in Large Economies," Review of Economic Studies, Wiley Blackwell, vol. 46(2), pages 263-82, April.
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- Sistemas políticos mudam mas os príncipios ficam
by Tiago Tavares in Mercado de Limões on 2009-06-18 12:20:44
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