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Reciprocity in the Principal–Multiple Agent Model

Author

Listed:
  • De Marco Giuseppe

    () (Dipartimento di Studi Aziendali e Quantitativi, University of Naples Parthenope, Via Generale Parisi 13, 80132 Naples, Italy)

  • Immordino Giovanni

    () (Dipartimento di Scienze Economiche e Statistiche, University of Salerno, Via Ponte Don Melillo, 84084 Fisciano (SA), Italy)

Abstract

This paper studies how incentives are affected by intention-based reciprocity preferences when the principal hires many agents. Our results describe the set of agents’ sensitivities to reciprocity 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. Instead, when the profile (first or second best) is asymmetric the principal’s interest might be better served by self-interested agents. We conclude the paper by clarifying when symmetric profiles are most likely to arise.

Suggested Citation

  • De Marco Giuseppe & Immordino Giovanni, 2014. "Reciprocity in the Principal–Multiple Agent Model," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 14(1), pages 1-38, January.
  • Handle: RePEc:bpj:bejtec:v:14:y:2014:i:1:p:38:n:8
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    References listed on IDEAS

    as
    1. Pedro Rey-Biel, 2008. "Inequity Aversion and Team Incentives," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(2), pages 297-320, June.
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    Cited by:

    1. Bierbrauer, Felix & Netzer, Nick, 2016. "Mechanism design and intentions," Journal of Economic Theory, Elsevier, vol. 163(C), pages 557-603.
    2. De Marco, Giuseppe & Immordino, Giovanni, 2013. "Partnership, reciprocity and team design," Research in Economics, Elsevier, vol. 67(1), pages 39-58.

    More about this item

    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

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