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Common agency with informed principals: Menus and signals

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  • Galperti, Simone

Abstract

This paper considers general games in which multiple informed principals simultaneously compete to influence the decisions of a common agent. It shows that we can characterize all outcomes of any game in which principals delegate the final decisions to the agent using arbitrary mechanisms, by studying a simpler game in which they can offer only menus of decisions and send cheap-talk signals to the agent. For games in which the principals instead participate in making final decisions, we can characterize all their outcomes by studying a simpler game in which principals can again send cheap-talk signals but can offer only menus of direct mechanisms, to which they report their information truthfully.

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  • Galperti, Simone, 2015. "Common agency with informed principals: Menus and signals," Journal of Economic Theory, Elsevier, vol. 157(C), pages 648-667.
    • Handle: RePEc:eee:jetheo:v:157:y:2015:i:c:p:648-667
    DOI: 10.1016/j.jet.2015.01.018
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    Cited by:

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    2. Ilias Boultzis, 2020. "Truthful Equilibria in Generalized Common Agency Models," Papers 2007.15942, arXiv.org.
    3. Jihwan Do & Nicolás Riquelme, 2024. "Information exchange through secret vertical contracts," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(3), pages 671-707, November.

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    More about this item

    Keywords

    Common agency; Informed principal; Inscrutability Principle; Delegation Principle; Menu; Signal;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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