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Menu Auctions and Influence Games with Private Information

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  • Martimort, David
  • Stole, Lars

Abstract

We study games in which multiple principals influence the choice of a privately-informed agent by offering action-contingent payments. We characterize the equilibrium allocation set as the maximizers of an endogenous aggregate virtual-surplus program. The aggregate maximand for every equilibrium includes an information-rent margin which captures the confluence of the principals’ rent-extraction motives. We illustrate the economic implications of this novel margin in two applications: a public goods game in which players incentivize a common public good supplier, and a lobbying game between conflicting interest groups who offer contributions to influence a common political decision-maker.

Suggested Citation

  • Martimort, David & Stole, Lars, 2015. "Menu Auctions and Influence Games with Private Information," MPRA Paper 62388, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:62388
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    References listed on IDEAS

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    Cited by:

    1. Didier Laussel & Joana Resende, 2020. "Complementary Monopolies with asymmetric information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(4), pages 943-981, November.
    2. David Martimort & Aggey Semenov & Lars Stole, 2016. "A Complete Characterization of Equilibria in Common Agency Screening Games," Working Papers 1618E, University of Ottawa, Department of Economics.
    3. Martimort, David & Semenov, Aggey & Stole, Lars A., 2018. "A complete characterization of equilibria in an intrinsic common agency screening game," Theoretical Economics, Econometric Society, vol. 13(3), September.
    4. Martimort, David, 2019. ""When Olson Meets Dahl": From Inefficient Groups Formation to Inefficient Policy-Making," CEPR Discussion Papers 13843, C.E.P.R. Discussion Papers.
    5. Jean Tirole, 2016. "From Bottom of the Barrel to Cream of the Crop: Sequential Screening With Positive Selection," Econometrica, Econometric Society, vol. 84, pages 1291-1343, July.
    6. Martimort, David & Semenov, Aggey & Stole, Lars, 2015. "A Complete Characterization of Equilibria in Two-type Common Agency Screening Games," MPRA Paper 66620, University Library of Munich, Germany.

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    More about this item

    Keywords

    Menu auctions; influence games; common agency; screening contracts; public goods games; lobbying games;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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