Reciprocity in the Principal Multiple Agent Model
AbstractThis paper studies how incentives are affected by intention-based reciprocity preferences when the principal hires many agents. Our results describe the agents' psychological attitudes required to sustain a given strategy profile. We also show that hiring reciprocal agents to implement a first or a second-best contract will always benefit the principal if the strategy profile is symmetric. When instead the profile (first or second-best) is asymmetric the principal's best interest might be better served by self-interested agents. We conclude the paper by clarifying when symmetric profiles are most likely to arise.
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Bibliographic InfoPaper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 314.
Date of creation: 10 May 2012
Date of revision:
reciprocity; many agents; psychological games;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-22 (All new papers)
- NEP-CBE-2012-05-22 (Cognitive & Behavioural Economics)
- NEP-CTA-2012-05-22 (Contract Theory & Applications)
- NEP-EVO-2012-05-22 (Evolutionary Economics)
- NEP-GTH-2012-05-22 (Game Theory)
- NEP-HRM-2012-05-22 (Human Capital & Human Resource Management)
- NEP-MIC-2012-05-22 (Microeconomics)
- NEP-SOC-2012-05-22 (Social Norms & Social Capital)
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