Competition Between Asymmetrically Informed Principals
AbstractThis 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.
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Bibliographic InfoPaper provided by Pennsylvania State - Department of Economics in its series Papers with number 11-95-13.
Length: 16 pages
Date of creation: 1995
Date of revision:
Contact details of provider:
Postal: PENNSYLVANIA STATE UNIVERSITY, DEPARTMENT OF ECONOMICS, UNIVERSITY PARK PENNSYLVANIA 16802 U.S.A.
Web page: http://econ.la.psu.edu/
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GAME THEORY; ECONOMIC EQUILIBRIUM;
Other versions of this item:
- Eric W. Bond & Thomas A. Gresik, 1997. "Competition between asymmetrically informed principals," Economic Theory, Springer, vol. 10(2), pages 227-240.
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
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- Diaw, K. & Pouyet, J., 2004.
"Competition, Incomplete Discrimination and Versioning,"
2004-69, Tilburg University, Center for Economic Research.
- Khaled Diaw & Jérôme Pouyet, 2004. "Competition, Incomplete Discrimination and Versioning," Working Papers 2004-20, Centre de Recherche en Economie et Statistique.
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- Rajdeep Sengupta, 2006.
"Foreign entry and bank competition,"
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- Xiaodong Wu, 2000. ""Pollution Havens" and the Regulation of Multinationals by Multiple Governments," Econometric Society World Congress 2000 Contributed Papers 1766, Econometric Society.
- Diaw, K. & Pouyet, J., 2004. "The Dilemma of Tax Competition: How (not) to attract (Inefficient) Firms?," Discussion Paper 2004-68, Tilburg University, Center for Economic Research.
- Thomas Tröger & Tymofiy Mylovanov, 2008. "Optimal Auction Design and Irrelevance of Private Information," Bonn Econ Discussion Papers bgse21_2008, University of Bonn, Germany.
- Mylovanov, Tymofiy & Tröger, Thomas, 2013. "Mechanism Design by an Informed Principal: The Quasi-Linear Private-Values Case," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 437, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Thomas Troeger & Tymofiy Mylovanov, 2010. "Optimal Auction Design and Irrelevance of Privacy of Information," 2010 Meeting Papers 1039, Society for Economic Dynamics.
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