Bilateral Mechanism Design: Practical Contracting in Multi-Agency
We modelize and investigate the analytical rationale of employing bilateral mechanism design, which simplifies collective mechanism design by ignoring relative information evaluation, in generalized multi-agency contracting games under Bayesian Nash equilibrium. We permit interdependent valuations, contract externalities, correlated types, and heterogeneous or different message sets of different agents. The delegation principle under Bayesian Nash equilibrium identifies that bilateral Bayesian mechanism design can be translated to delegated Bayesian menu design without loss of generality. We take advantage of interim-payoff-equivalence to provide economically interesting conditions on the primitives for the full equivalence in which bilateral mechanism design can be substituted for collective mechanism design. Our analysis can also incorporate individual rationality constraints. Moreover, we discuss the approximation of full equivalence and the case allowing primitive constraints across the contracts for different agents.
|Date of creation:||Mar 2013|
|Date of revision:|
|Contact details of provider:|| Postal: 812-855-1021|
Web page: http://www.iub.edu/~caepr
More information through EDIRC
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.:
- Frank Page & Paulo Monteiro, 2001.
"Three Principles of Competitive Nonlinear Pricing,"
AccessEcon, vol. 28(11), pages A0.
- Frank H. Page & Paulo Klinger Monteiro, 2002. "Three principles of competitive nonlinear pricing," Game Theory and Information 0204001, EconWPA.
- Page, F.H.Jr. & Monteiro, P.K., 2001. "Three Principles of Competitive Nonlinear Pricing," The Warwick Economics Research Paper Series (TWERPS) 592, University of Warwick, Department of Economics.
- Page Junior, Frank H. & Monteiro, P. K., 2002. "Three principles of competitive nonlinear pricing," Economics Working Papers (Ensaios Economicos da EPGE) 442, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Page, Frank Jr., 1987. "The existence of optimal contracts in the principal-agent model," Journal of Mathematical Economics, Elsevier, vol. 16(2), pages 157-167, April.
- David Martimort & Lars Stole, 2002.
"The Revelation and Delegation Principles in Common Agency Games,"
Econometric Society, vol. 70(4), pages 1659-1673, July.
- David Martimort & Lars Stole, 2001. "The Revelation and Delegation Principles in Common Agency Games," CESifo Working Paper Series 575, CESifo Group Munich.
- Han, Seungjin, 2004.
"Menu Theorems for Bilateral Contracting,"
Microeconomics.ca working papers
han-04-01-29-10-05-13, Vancouver School of Economics, revised 29 Jan 2004.
- Dequiedt, V. & Martimort, D., 2007.
"Mechanism design with private communication,"
200702, Grenoble Applied Economics Laboratory (GAEL).
- Page, Frank H, Jr, 1992. "Mechanism Design for General Screening Problems with Moral Hazard," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(2), pages 265-81, April.
- Michael Peters, 1999.
"Common Agency and the Revelation Principle,"
peters-99-01, University of Toronto, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:inu:caeprp:2013003. 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: (Center for Applied Economics and Policy Research)
If references are entirely missing, you can add them using this form.