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How to manage multiple interdepedent agents

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  • Pierre Fleckinger

    (CECO - Laboratoire d'économétrie de l'École polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique)

Abstract

We analyze a simple firm model in a principal multiagent framework under adverse selection. The firm's efficiency depends on the effort devoted to productive activities as well as on the fit between the divisions, for which costly coordination actions can be undertaken. The specificity of the model is that the hidden information may not be ranked objectively, as opposed to more standard models which assume the Spence-Mirrlees condition. This specificity ordinarily induces a non-monotous rent profile over the types and might lead to pooling. Nonetheless, a sufficient condition is given for the rents to be completely eliminated. It is related to the Principal's ability to create ''bayesian'' countervailing incentives.

Suggested Citation

  • Pierre Fleckinger, 2003. "How to manage multiple interdepedent agents," Working Papers hal-00242983, HAL.
    • Handle: RePEc:hal:wpaper:hal-00242983
    Note: View the original document on HAL open archive server: https://hal.science/hal-00242983v1
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    References listed on IDEAS

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