Common Agency and Coordination: General Theory and Application to Government Policy Making
AbstractWe develop a model of common agency with complete information and general preferences with nontransferable utility, and we prove that the principals' Nash equilibrium in truthful strategies implements an efficient action. We 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 lumpâ€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.
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Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3450061.
Date of creation: 1997
Date of revision:
Publication status: Published in Journal of Political Economy -Chicago-
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," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(4), pages 752-69, August.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hammond, Peter J, 1979. "Straightforward Individual Incentive Compatibility in Large Economies," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 46(2), pages 263-82, April.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- 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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