IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Multidimensional communication mechanisms: cooperative and conflicting designs

  • Frédéric Koessler

    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris)

  • David Martimort

    (IDEI - Institut d'économie industrielle - Université Toulouse I (UT1) Capitole)

This paper investigates optimal communication mechanisms with a two-dimensional policy space and no monetary transfers. Contrary to the one-dimensional setting, when a single principal controls two activities undertaken by his agent (cooperative design), the optimal communication mechanism never exhibits any pooling and the agent's ideal policies are never chosen. However, when the conflicts of interests between the agent and the principal on each dimension of the agent's activity are close to each other, simpler mechanisms that generalize those optimal in the one-dimensional case perform quite well. These simple mechanisms exhibit much pooling. When each activity of the agent is controlled by a different principal (non-cooperative design) and enters separately into the agent's utility function, optimal mechanisms under private communication take again the form of simple delegation sets, exactly as in the one-dimensional case. When instead the agent finds some benefits in coordinating actions, a one-sided contractual externality arises between principals under private communication. Under public communication instead, there does not exist any pure strategy Nash equilibrium with continuous and piecewise differentiable communication mechanisms. Relaxing the commitment ability of the principals restores equilibrium existence under public communication and yields partitional equilibria. Compared with private communication, public communication generates discipline or subversion effects among principals depending on the profile of their respective biases with respect to the agent's ideal policies.

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.

File URL: http://halshs.archives-ouvertes.fr/docs/00/58/68/54/PDF/wp200807.pdf
Download Restriction: no

Paper provided by HAL in its series PSE Working Papers with number halshs-00586854.

as
in new window

Length:
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:hal:psewpa:halshs-00586854
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00586854
Contact details of provider: Web page: http://hal.archives-ouvertes.fr/

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hal:psewpa:halshs-00586854. 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: (CCSD)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.