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Delegation Principle for Multi-agency Games under Ex Post Equilibrium


  • Yu Chen

    () (Nanjing University)

  • Zhenhua Wu

    () (Nanjing University)


We explore the strategic equivalence of the delegated menu contracting procedure in pure-strategy multi-agency games under ex post equilibrium. Our model setup permits "full-blown interdependence," including information externality, contract externality, correlated types, and primitive constraints across the contracts for different agents. Our delegation principle identifies that (optimal) ex post menu design is strategically equivalent to (optimal) bilateral ex post mechanism design, which simplifies collective ex post mechanism design by ignoring relative information evaluation. Moreover, one can restrict attention to product menu design problems out of general menu design problems if the contract constraint sets have product structures. Our results still hold if we include individual rationality or any degenerated form of "full-blown interdependence."

Suggested Citation

  • Yu Chen & Zhenhua Wu, 2012. "Delegation Principle for Multi-agency Games under Ex Post Equilibrium," Caepr Working Papers 2012-008, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
  • Handle: RePEc:inu:caeprp:2012008

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    References listed on IDEAS

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    More about this item


    multi-agency; ex post equilibrium; mechanism design; menu design; delegation principle;

    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law


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