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Menu Auctions and Influence Games with Private Information

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  • Martimort, David
  • Stole, Lars

Abstract

We study games in which multiple principals influence the choice of a privately-informed agent by offering action-contingent payments. We characterize the equilibrium allocation set as the maximizers of an endogenous aggregate virtual-surplus program. The aggregate maximand for every equilibrium includes an information-rent margin which captures the confluence of the principals’ rent-extraction motives. We illustrate the economic implications of this novel margin in two applications: a public goods game in which players incentivize a common public good supplier, and a lobbying game between conflicting interest groups who offer contributions to influence a common political decision-maker.

Suggested Citation

  • Martimort, David & Stole, Lars, 2015. "Menu Auctions and Influence Games with Private Information," MPRA Paper 62388, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:62388
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    References listed on IDEAS

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    Cited by:

    1. Martimort, David & Semenov, Aggey & Stole, Lars, 2017. "A Complete Characterization of Equilibria in a Common Agency Screening Game," MPRA Paper 80870, University Library of Munich, Germany.
    2. David Martimort & Aggey Semenov & Lars Stole, 2016. "A Complete Characterization of Equilibria in Common Agency Screening Games," Working Papers 1618E, University of Ottawa, Department of Economics.
    3. repec:the:publsh:2266 is not listed on IDEAS
    4. Martimort, David & Semenov, Aggey & Stole, Lars, 2015. "A Complete Characterization of Equilibria in Two-type Common Agency Screening Games," MPRA Paper 66620, University Library of Munich, Germany.

    More about this item

    Keywords

    Menu auctions; influence games; common agency; screening contracts; public goods games; lobbying games;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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