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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 445-482, January.
    • Handle: RePEc:bpj:bejtec:v:14:y:2014:i:1:p:38:n:8
    DOI: 10.1515/bejte-2013-0022
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    5. Mark T. Le Quement & Amrish Patel, 2018. "Communication as Gift-Exchange," University of East Anglia School of Economics Working Paper Series 2018-06, School of Economics, University of East Anglia, Norwich, UK..

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    More about this item

    Keywords

    reciprocity; many agents; psychological games;
    All these keywords.

    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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