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The Principal-Agent Matching Market

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  • Kaniska Dam

Abstract

We propose a model based on competitive markets in order to analyse an economy with several principals and agents. We model the principal-agent economy as a two-sided matching game and characterise the set of stable outcomes of this principal-agent matching market. A simple mechanism to implement the set of stable outcomes is proposed. Finally, we put forward examples of principal-agent economies where the results fit.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 945.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_945

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Keywords: principal-agent; moral hazard; matching; implementation;

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  1. Dilip Mookherjee & Debraj Ray, 2002. "Contractual Structure and Wealth Accumulation," American Economic Review, American Economic Association, vol. 92(4), pages 818-849, September.
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  5. Kamecke, U, 1989. "Non-cooperative Matching Games," International Journal of Game Theory, Springer, vol. 18(4), pages 423-31.
  6. Legros, Patrick & Newman, Andrew, 2002. "Assortative Matching in a Non-transferable World," CEPR Discussion Papers 3469, C.E.P.R. Discussion Papers.
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  8. Daniel A. Ackerberg & Maristella Botticini, 1999. "Endogenous Matching and the Empirical Determinants of Contract Form," Boston University - Institute for Economic Development, Boston University, Institute for Economic Development 92, Boston University, Institute for Economic Development.
  9. Besanko, David & Thakor, Anjan V, 1987. "Collateral and Rationing: Sorting Equilibria in Monopolistic and Competitive Credit Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(3), pages 671-89, October.
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  11. José Alcalde Pérez & Antonio Romero-Medina & David Pérez-Castrillo, 1997. "Hiring procedures to implement stable allocations," Working Papers. Serie AD, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) 1997-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  12. de Mesa, David & Webb, David C., 1992. "Efficient credit rationing," European Economic Review, Elsevier, vol. 36(6), pages 1277-1290, August.
  13. Basu, Kaushik, 1992. "Limited liability and the existence of share tenancy," Journal of Development Economics, Elsevier, vol. 38(1), pages 203-220, January.
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  17. Ghatak, Maitreesh & Pandey, Priyanka, 2000. "Contract choice in agriculture with joint moral hazard in effort and risk," Journal of Development Economics, Elsevier, vol. 63(2), pages 303-326, December.
  18. Alcalde, Jose & Romero-Medina, Antonio, 2000. "Simple Mechanisms to Implement the Core of College Admissions Problems," Games and Economic Behavior, Elsevier, vol. 31(2), pages 294-302, May.
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Citations

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Cited by:
  1. Ghatak, Maitreesh & Karaivanov, Alexander, 2011. "Contractual Structure and Endogenous Matching in Partnerships," CEPR Discussion Papers 8298, C.E.P.R. Discussion Papers.
  2. Seungjin Han, 2014. "Ex-Post Equilibrium in Frictional Markets," Department of Economics Working Papers 2014-05, McMaster University, revised Aug 2014.
  3. Kaniska Dam & David Pérez-Castrillo, 2003. "Equilibrium Limited Liability Contracts in a Landlord-Tenant Market," Working Papers 99, Barcelona Graduate School of Economics.
  4. Ulf von Lilienfeld-Toal & Dilip Mookherjee, 2010. "The Political Economy of Debt Bondage," American Economic Journal: Microeconomics, American Economic Association, vol. 2(3), pages 44-84, August.
  5. Seungjin Han, 2014. "Robust Competitive Auctions: A Theory of Stable Markets," Department of Economics Working Papers 2014-04, McMaster University, revised Apr 2014.
  6. Timothy Besley & Maitreesh Ghatak, 2003. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics 2202, London School of Economics and Political Science, LSE Library.
  7. Serfes, Konstantinos, 2013. "A Price Theory of Vertical and Lateral Integration under Two-Sided Productivity Heterogeneity," School of Economics Working Paper Series 2013-6, LeBow College of Business, Drexel University, revised 06 Mar 2014.
  8. Michael Kosfeld & Ferdinand A. von Siemens, 2011. "Competition, cooperation, and corporate culture," RAND Journal of Economics, RAND Corporation, vol. 42(1), pages 23-43, 03.
  9. Hong, Suting, 2013. "Competition, syndication, and entry in the venture capital market," Working Papers 13-49, Federal Reserve Bank of Philadelphia.
  10. Li, Fei & Ueda, Masako, 2009. "Why do reputable agents work for safer firms?," Finance Research Letters, Elsevier, Elsevier, vol. 6(1), pages 2-12, March.
  11. Ghatak, Maitreesh & Karaivanov, Alexander, 2013. "Contractual Structure in Agriculture with Endogenous Matching," CAGE Online Working Paper Series, Competitive Advantage in the Global Economy (CAGE) 120, Competitive Advantage in the Global Economy (CAGE).

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