IDEAS home Printed from https://ideas.repec.org/a/eee/mateco/v40y2004i3-4p227-245.html
   My bibliography  Save this article

Strategic consensus

Author

Listed:
  • Aidt, Toke S.
  • Dutta, Jayasri

Abstract

We study equilibrium retention rules in a dynamic common agency game. The decision to reappoint or not is made by a committee consisting of two principals: the retention decision is uncertain if the two principals disagree. We demonstrate that all equilibrium paths exhibit what we call strategic consensus: the agent takes actions that satisfy the performance standards of all principals on the one hand, and all principals lower their standards such that the agent wants to satisfy them on the other. This result applies both to economies with sub- and super-additive costs of providing utilities to the principals.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Aidt, Toke S. & Dutta, Jayasri, 2004. "Strategic consensus," Journal of Mathematical Economics, Elsevier, vol. 40(3-4), pages 227-245, June.
    • Handle: RePEc:eee:mateco:v:40:y:2004:i:3-4:p:227-245
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304-4068(04)00002-3
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bergemann, Dirk & Valimaki, Juuso, 2003. "Dynamic common agency," Journal of Economic Theory, Elsevier, vol. 111(1), pages 23-48, July.
    2. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(1), pages 1-31.
    3. Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-769, August.
    4. Aidt, Toke S. & Magris, Francesco, 2006. "Capital taxation and electoral accountability," European Journal of Political Economy, Elsevier, vol. 22(2), pages 277-291, June.
    5. Banks, Jeffrey S. & Sundaram, Rangarajan K., 1998. "Optimal Retention in Agency Problems," Journal of Economic Theory, Elsevier, vol. 82(2), pages 293-323, October.
    6. Barnett,William A. & Schofield,Norman & Hinich,Melvin (ed.), 1993. "Political Economy: Institutions, Competition and Representation," Cambridge Books, Cambridge University Press, number 9780521428316, September.
    7. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Toke S. Aidt & Jayasri Dutta, 2017. "Fiscal Federalism and Electoral Accountability," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(1), pages 38-58, February.
    2. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    3. Dalibor Eterovic, 2009. "Policy Reform Under Electoral Uncertainty," Working Papers Central Bank of Chile 546, Central Bank of Chile.
    4. Aidt, T.S. & Dutta, J., 2008. "Electoral Uncertainty and Public Goods," Cambridge Working Papers in Economics 0843, Faculty of Economics, University of Cambridge.
    5. Toke S. Aidt & Jayasri Dutta, 2017. "Fiscal Federalism and Electoral Accountability," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(1), pages 38-58, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. César Martinelli & John Duggan, 2014. "The Political Economy of Dynamic Elections: A Survey and Some New Results," Working Papers 1403, Centro de Investigacion Economica, ITAM.
    2. Dhammika Dharmapala & Etienne Lehmann, 2003. "A Median Voter Theorem for Postelection Politics," Working papers 2003-47, University of Connecticut, Department of Economics.
    3. Aidt, Toke S. & Magris, Francesco, 2006. "Capital taxation and electoral accountability," European Journal of Political Economy, Elsevier, vol. 22(2), pages 277-291, June.
    4. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    5. Ismael Issifou & Francesco Magris, 2017. "Migration outflows and optimal migration policy: rules versus discretion," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 16(2), pages 87-112, August.
    6. Mattozzi, Andrea & Merlo, Antonio, 2008. "Political careers or career politicians?," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 597-608, April.
    7. Giorgio Bellettini & Gianmarco I. P. Ottaviano, 2005. "Special Interests and Technological Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 43-56.
    8. Antonio Merlo, 2005. "Whither Political Economy? Theories, Facts and Issues," PIER Working Paper Archive 05-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Dec 2005.
    9. Duggan, John, 2017. "Term limits and bounds on policy responsiveness in dynamic elections," Journal of Economic Theory, Elsevier, vol. 170(C), pages 426-463.
    10. Le Borgne, Eric & Lockwood, Ben, 2000. "Candidate Entry, Screening, and the Political Budget Cycle," The Warwick Economics Research Paper Series (TWERPS) 582, University of Warwick, Department of Economics.
    11. Cadot, Olivier & Roller, Lars-Hendrik & Stephan, Andreas, 2006. "Contribution to productivity or pork barrel? The two faces of infrastructure investment," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1133-1153, August.
    12. Kirchsteiger, Georg & Prat, Andrea, 2001. "Inefficient equilibria in lobbying," Journal of Public Economics, Elsevier, vol. 82(3), pages 349-375, December.
    13. Melvyn G. Coles & Jan Eeckhout, 2000. "Heterogeneity as a coordination device," Economics Working Papers 510, Department of Economics and Business, Universitat Pompeu Fabra.
    14. Konishi, Hideki, 2006. "Spending cuts or tax increases? The composition of fiscal adjustments as a signal," European Economic Review, Elsevier, vol. 50(6), pages 1441-1469, August.
    15. Campante, Filipe R. & Ferreira, Francisco H.G., 2007. "Inefficient lobbying, populism and oligarchy," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 993-1021, June.
    16. Bernhardt, Dan & Campuzano, Larissa & Squintani, Francesco & Câmara, Odilon, 2009. "On the benefits of party competition," Games and Economic Behavior, Elsevier, vol. 66(2), pages 685-707, July.
    17. Uk Hwang & Francesco Magris, 2005. "Intergenerational Conflicts and the Resource Policy Formation of a Short-Lived Government," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 437-457, September.
    18. John Duggan & César Martinelli, 2020. "Electoral Accountability and Responsive Democracy," The Economic Journal, Royal Economic Society, vol. 130(627), pages 675-715.
    19. Lindsey Gailmard, 2022. "Electoral accountability and political competence," Journal of Theoretical Politics, , vol. 34(2), pages 236-261, April.
    20. Adam Meirowitz, 2005. "Keeping the other candidate guessing: Electoral competition when preferences are private information," Public Choice, Springer, vol. 122(3), pages 299-318, March.

    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:mateco:v:40:y:2004:i:3-4:p:227-245. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jmateco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.