Trading with a common agent under complete information: A characterization of Nash equilibria
We analyze an abstract model of trading where N principals submit quantity-payment schedules that describe the contracts they offer to an agent, and the agent then chooses how much to trade with every principal. This represents a special class of common agency games with complete information. We study all the subgame perfect Nash equilibria of these games, not only truthful ones, providing a complete characterization of equilibrium payoffs. In particular, we show that the equilibrium that is Pareto-dominant for the principals is not truthful when there are more than two of them. We also provide a partial characterization of equilibrium strategies.
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.
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.:
- Spulber, Daniel F., 1979. "Non-cooperative equilibrium with price discriminating firms," Economics Letters, Elsevier, vol. 4(3), pages 221-227.
- Dirk Bergemann & Juuso Valimaki, 1998.
"Dynamic Common Agency,"
1259, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Milgrom,Paul, 2004.
"Putting Auction Theory to Work,"
Cambridge University Press, number 9780521551847, Junio.
- Martimort David & Stole Lars, 2003.
"Contractual Externalities and Common Agency Equilibria,"
The B.E. Journal of Theoretical Economics,
De Gruyter, vol. 3(1), pages 1-40, July.
- David Martimort & Lars Stole, 2001. "Contractual Externalities and Common Agency Equilibria," CESifo Working Paper Series 581, CESifo Group Munich.
- Martimort, David & Stole, Lars, 1999. "Contractual Externalities and Common Agency Equilibria," IDEI Working Papers 110, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2003.
- Farrell, Joseph & Katz, Michael L, 2000.
"Innovation, Rent Extraction, and Integration in Systems Markets,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 48(4), pages 413-32, December.
- Joseph Farrell & Michael L. Katz, 2001. "Innovation, Rent Extraction, and Integration in Systems Markets," Industrial Organization 0012001, EconWPA.
- Joseph Farrell & Michael L. Katz, 2003. "Innovation, Rent Extraction, and Integration in Systems Markets," Development and Comp Systems 0303005, EconWPA.
- Farrell, Joseph & Katz, Michael, 2000. "Innovation, Rent Extraction, and Integration in Systems Markets," Competition Policy Center, Working Paper Series qt1441h2tj, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Farrell, Joseph & Katz, Michael, 2000. "Innovation, Rent Extraction, and Integration in Systems Markets," Department of Economics, Working Paper Series qt15k4v7xb, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Joseph Farrell and Michael L. Katz., 2000. "Innovation, Rent Extraction, and Integration in Systems Markets," Economics Working Papers E00-286, University of California at Berkeley.
- Bruno Versaevel & Etienne Billette de Villemeur, 2003.
"From Private to Public Common Agency,"
- Michael Peters, 1999.
"Common Agency and the Revelation Principle,"
peters-99-01, University of Toronto, Department of Economics.
- Giacomo Calzolari, 2004. "Incentive Regulation of Multinational Enterprises," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(1), pages 257-282, 02.
- B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
- David Martimort & Lars Stole, 2001.
"The Revelation and Delegation Principles in Common Agency Games,"
CESifo Working Paper Series
575, CESifo Group Munich.
- David Martimort & Lars Stole, 2002. "The Revelation and Delegation Principles in Common Agency Games," Econometrica, Econometric Society, vol. 70(4), pages 1659-1673, July.
- Konishi, Hideo & Le Breton, Michel & Weber, Shlomo, 1999.
"On Coalition-Proof Nash Equilibria in Common Agency Games,"
Journal of Economic Theory,
Elsevier, vol. 85(1), pages 122-139, March.
- KONISHI, Hideo & LE BRETON, Michel & WEBER, Shlomo, . "On coalition-proof Nash equilibria in common agency games," CORE Discussion Papers RP 1383, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Laussel, Didier & Le Breton, Michel, 2001.
"Conflict and Cooperation: The Structure of Equilibrium Payoffs in Common Agency,"
Journal of Economic Theory,
Elsevier, vol. 100(1), pages 93-128, September.
- LAUSSEL, Didier & LE BRETON, Michel, . "Conflict and cooperation. The structure of equilibrium payoffs in common agency," CORE Discussion Papers RP 1519, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Bhaskar, V & To, Ted, 2002.
"Is perfect price discrimination really efficient? An analysis of free entry,"
Economics Discussion Papers
8840, University of Essex, Department of Economics.
- V. Bhaskar & Ted To, 2004. "Is Perfect Price Discrimination Really Efficient? An Analysis of Free Entry," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 762-776, Winter.
- Mortimort, D., 1992.
"Multi-principaux avec anti-selection,"
92.f, Toulouse - GREMAQ.
- Daniel P. O'Brien & Greg Shaffer, 1997. "Nonlinear Supply Contracts, Exclusive Dealing, and Equilibrium Market Foreclosure," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(4), pages 755-785, December.
- Michael Spence, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Oxford University Press, vol. 43(2), pages 217-235.
- James J. Anton & Dennis A. Yao, 1989. "Split Awards, Procurement, and Innovation," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 538-552, Winter.
- Michael Peters, 2000.
"Negotiation and Take it or Leave it in Common Agency,"
peters-00-02, University of Toronto, Department of Economics.
- Peters, Michael, 2003. "Negotiation and take it or leave it in common agency," Journal of Economic Theory, Elsevier, vol. 111(1), pages 88-109, July.
- Kirchsteiger, Georg & Prat, Andrea, 2001.
"Inefficient equilibria in lobbying,"
Journal of Public Economics,
Elsevier, vol. 82(3), pages 349-375, December.
- Kala Krishna & Torben Tranæ s, 2002. "Allocating multiple units," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(4), pages 733-750.
- Ilya Segal & Michael D. Whinston, 2003. "Robust Predictions for Bilateral Contracting with Externalities," Econometrica, Econometric Society, vol. 71(3), pages 757-791, 05.
When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:144:y:2009:i:1:p:296-311. 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: (Shamier, Wendy)
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.