Definable and Contractible Contracts
This paper analyzes Bayesian normal form games in which players write contracts that condition their actions on the contracts of the other players. These contracts are required to be representable in a formal language. This is accomplished by constructing contracts which are definable functions of the Godel code of every other player's contract. We provide a complete characterization of the set of allocations supportable as pure strategy Bayesian equilibrium of this contracting game. When information is complete, this characterization provides a folk theorem. In general, the set of supportable allocations is smaller than the set supportable by a centralized mechanism designer.
|Date of creation:||22 Jan 2009|
|Date of revision:||13 May 2010|
|Contact details of provider:|| Web page: http://www.economics.ubc.ca/|
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.:
- Myerson, Roger B, 1983.
"Mechanism Design by an Informed Principal,"
Econometric Society, vol. 51(6), pages 1767-1797, November.
- Takuro Yamashita, 2010. "Mechanism Games With Multiple Principals and Three or More Agents," Econometrica, Econometric Society, vol. 78(2), pages 791-801, 03.
- Martimort, David & Moreira, Humberto, 2010.
"Common agency and public good provision under asymmetric information,"
Econometric Society, vol. 5(2), May.
- David Martimort & Humberto Moreira, 2010. "Common agency and public good provision under asymmetric information," Post-Print halshs-00754453, HAL.
- Kyle Bagwell & Robert W. Staiger, 1997.
"Reciprocity, Non-discrimination and Preferential Agreements in the Multilateral Trading System,"
NBER Working Papers
5932, National Bureau of Economic Research, Inc.
- Bagwell, Kyle & Staiger, Robert W., 2001. "Reciprocity, non-discrimination and preferential agreements in the multilateral trading system," European Journal of Political Economy, Elsevier, vol. 17(2), pages 281-325, June.
- Peters, Michael & Troncoso-Valverde, Cristián, 2013.
"A folk theorem for competing mechanisms,"
Journal of Economic Theory,
Elsevier, vol. 148(3), pages 953-973.
- Epstein, Larry G. & Peters, Michael, 1999.
"A Revelation Principle for Competing Mechanisms,"
Journal of Economic Theory,
Elsevier, vol. 88(1), pages 119-160, September.
- Michael L. Katz, 2006. "Observable Contracts as Commitments: Interdependent Contracts and Moral Hazard," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(3), pages 685-706, 09.
When requesting a correction, please mention this item's handle: RePEc:ubc:pmicro:michael_peters-2009-7. 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: (Maureen Chin)
If references are entirely missing, you can add them using this form.