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Reciprocity in the Principal–Multiple Agent Model

Listed author(s):
  • 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)

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.

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Article provided by De Gruyter in its journal The B.E. Journal of Theoretical Economics.

Volume (Year): 14 (2014)
Issue (Month): 1 (January)
Pages: 1-38

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Handle: RePEc:bpj:bejtec:v:14:y:2014:i:1:p:38:n:8
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  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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  8. Giuseppe Attanasi & Pierpaolo Battigalli & Elena Manzoni, 2016. "Incomplete-Information Models of Guilt Aversion in the Trust Game," Management Science, INFORMS, vol. 62(3), pages 648-667, March.
  9. Al-Ubaydli, Omar & Lee, Min Sok, 2012. "Do you reward and punish in the way you think others expect you to?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(3), pages 336-343.
  10. De Marco, Giuseppe & Immordino, Giovanni, 2013. "Partnership, reciprocity and team design," Research in Economics, Elsevier, vol. 67(1), pages 39-58.
  11. Vyrastekova, J. & Garikipati, S., 2005. "Beliefs and Trust : An Experiment," Discussion Paper 2005-88, Tilburg University, Center for Economic Research.
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