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Common Agency Games with Common Value Exclusion, Convexity and Existence

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  • Gwenaël Piaser

Abstract

We consider the model common agency proposed by Biais Martimort and Ro- chet (2000, 2013). We show that in this setting there is no symmetric equilibrium as the one characterized in those articles. We argue that the equilibrium price sched- ules cannot be simultaneously convex and concave. In particular in the monopoly case, under some classical assumptions, some agents will be excluded from trade. In the other that a price schedule at any symmetric equilibrium must be must be convex and concave. We conclude that a symmetric equilibrium cannot exist and discuss the implications of our result and the links with the existing literature.

Suggested Citation

  • Gwenaël Piaser, 2014. "Common Agency Games with Common Value Exclusion, Convexity and Existence," Working Papers 2014-420, Department of Research, Ipag Business School.
  • Handle: RePEc:ipg:wpaper:2014-420
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    1. Alberto Bisin & Danilo Guaitoli, 2004. "Moral Hazard and Nonexclusive Contracts," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 306-328, Summer.
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    8. Peters, Michael, 2001. "Common Agency and the Revelation Principle," Econometrica, Econometric Society, vol. 69(5), pages 1349-1372, September.
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    10. Carmona, Guilherme & Fajardo, José, 2009. "Existence of equilibrium in common agency games with adverse selection," Games and Economic Behavior, Elsevier, vol. 66(2), pages 749-760, July.
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    13. Eugenio J. Miravete, 2002. "Preserving Log-Concavity Under Convolution: Comment," Econometrica, Econometric Society, vol. 70(3), pages 1253-1254, May.
    14. Jullien, Bruno, 2000. "Participation Constraints in Adverse Selection Models," Journal of Economic Theory, Elsevier, vol. 93(1), pages 1-47, July.
    15. Gwenael Piaser, 2004. "The Biais-Martimort-Rochet equilibrium with direct mechanisms," Game Theory and Information 0412007, EconWPA.
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