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Role of linking mechanisms in multitask agency with hidden information

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  • Matsushima, Hitoshi
  • Miyazaki, Koichi
  • Yagi, Nobuyuki

Abstract

We investigate the adverse selection problem where a principal delegates multiple tasks to an agent. We characterize the virtually implementable social choice functions by using the linking mechanism proposed by Jackson and Sonnenschein (2007) [20] that restricts the message spaces. The principal does not require any incentive wage schemes and can therefore avoid any information rent and welfare loss. We show the resemblance between the functioning of this message space restriction and that of incentive wage schemes. We also extend the results of the single-agent model to the multi-agent model.

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  • Matsushima, Hitoshi & Miyazaki, Koichi & Yagi, Nobuyuki, 2010. "Role of linking mechanisms in multitask agency with hidden information," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2241-2259, November.
    • Handle: RePEc:eee:jetheo:v:145:y:2010:i:6:p:2241-2259
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    Cited by:

    1. David A. Miller & Kareen Rozen, 2011. "Optimally Empty Promises and Endogenous Supervision," Cowles Foundation Discussion Papers 1823, Cowles Foundation for Research in Economics, Yale University, revised Jun 2012.
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    3. Hitoshi Matsushima, 2010. "Role Of Relative And Absolute Performance Evaluations In Intergroup Competition," The Japanese Economic Review, Japanese Economic Association, vol. 61(4), pages 443-454, December.
    4. Hitoshi Matsushiima, 2006. "Relative Performance Evaluation between Multitask Agents," CARF F-Series CARF-F-067, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    5. Xiao Lin & Ce Liu, 2022. "Credible Persuasion," Papers 2205.03495, arXiv.org.

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