The Principal-Agent Matching Market
We propose an agency model based on competitive markets in order to analyse an economy with several homogeneous principals and heterogeneous agents. We model the principal-agent economy as a two-sided matching game and characterise the set of stable outcomes (equilibria) of this market. In this regard we generalise the assignment game of Shapley and Shubik (1972). Unlike in the standard principal-agent theory, equilibrium payoffs of all the individuals are endogenous, equilibrium contracts are Pareto optimal, and the incremental surplus generated in a principal-agent relationship accrues to the tenant. We design a simple non-cooperative game which implements the set of stable outcomes in subgame perfect equilibrium. We also suggest policy measures in relation to efficiency and income distribution.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 2 (2006)
Issue (Month): 1 (August)
|Contact details of provider:|| Web page: http://www.degruyter.com|
|Order Information:||Web: http://www.degruyter.com/view/j/bejte|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tayfun Sönmez & Tarik Kara, 1997. "Implementation of college admission rules (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 9(2), pages 197-218.
- Kamecke, U, 1989. "Non-cooperative Matching Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 18(4), pages 423-31.
- Perez-Castrillo, David & Sotomayor, Marilda, 2002.
"A Simple Selling and Buying Procedure,"
Journal of Economic Theory,
Elsevier, vol. 103(2), pages 461-474, April.
- Perez-Castrillo, D. & Sotomayor, M., 1998. "A Simple Selling and Buying Procedure," UFAE and IAE Working Papers 421.98, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- David Perez-Castrillo & Marilda Sotomayor, 2000. "A Simple Selling and Buying Procedure," Econometric Society World Congress 2000 Contributed Papers 0704, Econometric Society.
- Daniel A. Ackerberg & Maristella Botticini, 2002.
"Endogenous Matching and the Empirical Determinants of Contract Form,"
Journal of Political Economy,
University of Chicago Press, vol. 110(3), pages 564-591, June.
- Ackerberg, D.A. & Botticini, M., 1999. "Endogenous Matching and the Empirical Determinants of Contract Form," Papers 96, Boston University - Department of Economics.
- Daniel A. Ackerberg & Maristella Botticini, 1999. "Endogenous Matching and the Empirical Determinants of Contract Form," Papers 0096, Boston University - Industry Studies Programme.
- Daniel A. Ackerberg & Maristella Botticini, 1999. "Endogenous Matching and the Empirical Determinants of Contract Form," Boston University - Institute for Economic Development 92, Boston University, Institute for Economic Development.
- Roberto Perotti, 1996. "Redistribution and Non-Consumption Smoothing in an Open Economy," Review of Economic Studies, Oxford University Press, vol. 63(3), pages 411-433.
- Besanko, David & Thakor, Anjan V, 1987. "Collateral and Rationing: Sorting Equilibria in Monopolistic and Competitive Credit Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(3), pages 671-89, October.
- Dilip Mookherjee & Debraj Ray, 2000.
"Contractual Structure and Wealth Accumulation,"
Econometric Society World Congress 2000 Contributed Papers
1538, Econometric Society.
- Dilip Mookherjee & Debraj Ray, 2000. "Contractual Structure and Wealth Accumulation," Boston University - Institute for Economic Development 107, Boston University, Institute for Economic Development.
- Sengupta, Kunal, 1997. "Limited liability, moral hazard and share tenancy," Journal of Development Economics, Elsevier, vol. 52(2), pages 393-407, April.
- Serfes, Konstantinos, 2005. "Risk sharing vs. incentives: Contract design under two-sided heterogeneity," Economics Letters, Elsevier, vol. 88(3), pages 343-349, September.
- Bester,Helmut Hellwig,Martin, 1987. "Moral hazard and equilibrium credit rationing: An overview of the issues," Discussion Paper Serie A 125, University of Bonn, Germany.
- José Alcalde Pérez & Antonio Romero-Medina & David Pérez-Castrillo, 1997.
"Hiring procedures to implement stable allocations,"
Working Papers. Serie AD
1997-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- de Mesa, David & Webb, David C., 1992. "Efficient credit rationing," European Economic Review, Elsevier, vol. 36(6), pages 1277-1290, August.
- repec:esx:essedp:550 is not listed on IDEAS
- Ghatak, Maitreesh & Pandey, Priyanka, 2000. "Contract choice in agriculture with joint moral hazard in effort and risk," Journal of Development Economics, Elsevier, vol. 63(2), pages 303-326, December.
- Bhaskar, V, 2002. "Relative Performance Evaluation and Limited Liability," Economics Discussion Papers 8852, University of Essex, Department of Economics.
- Fátima Barros & Inés Macho-Stadler, 1998. "Competition for Managers and Product Market Efficiency," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 89-103, 03.
- Legros, Patrick & Newman, Andrew, 2002. "Assortative Matching in a Non-transferable World," CEPR Discussion Papers 3469, C.E.P.R. Discussion Papers.
- Romero-Medina, Antonio & Alcalde, J., 1999.
"Simple mechanisms to implement the core of college admissions problems,"
UC3M Working papers. Economics
6124, Universidad Carlos III de Madrid. Departamento de Economía.
- Alcalde, Jose & Romero-Medina, Antonio, 2000. "Simple Mechanisms to Implement the Core of College Admissions Problems," Games and Economic Behavior, Elsevier, vol. 31(2), pages 294-302, May.
- José Alcalde Pérez & Antonio Romero-Medina, 1996. "Simple mechanisms to implement the core of college admissions problems," Working Papers. Serie AD 1996-13, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Basu, Kaushik, 1992. "Limited liability and the existence of share tenancy," Journal of Development Economics, Elsevier, vol. 38(1), pages 203-220, January.
When requesting a correction, please mention this item's handle: RePEc:bpj:bejtec:v:frontiers.2:y:2006:i:1:n:1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.