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Collective screening

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Listed:
  • Vincent Anesi
  • Peter Buisseret

Abstract

We study a dynamic principal-agent model in which the principal is a group whose members hold heterogeneous and evolving values from an agreement with the agent. Learning about the agent’s private information reduces the principals’ conflicts over their joint offer, mitigating a principal’s losses if she is not decisive over future offers. As a consequence, a principal in a group prefers to screen the agent more aggressively than a single principal. We study the dynamics of the principals’ collective choice, and obtain conditions under which decisive members of the group successively trade away their decision-making authority, leading inexorably to the concentration of negotiation power in the hands of a single principal.

Suggested Citation

  • Vincent Anesi & Peter Buisseret, 2023. "Collective screening," Discussion Papers 2023-01, Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP).
    • Handle: RePEc:not:notnic:2023-01
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    File URL: https://www.nottingham.ac.uk/research/groups/nicep/documents/working-papers/2023/2023-01.pdf
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    References listed on IDEAS

    as
    1. Peter Buisseret & Dan Bernhardt, 2017. "Dynamics of Policymaking: Stepping Back to Leap Forward, Stepping Forward to Keep Back," American Journal of Political Science, John Wiley & Sons, vol. 61(4), pages 820-835, October.
    2. Anesi, Vincent & Duggan, John, 2018. "Existence and indeterminacy of markovian equilibria in dynamic bargaining games," Theoretical Economics, Econometric Society, vol. 13(2), May.
    3. Laffont, Jean-Jacques, 2001. "Incentives and Political Economy," OUP Catalogue, Oxford University Press, number 9780199248681.
    4. Wouter Dessein, 2002. "Authority and Communication in Organizations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 811-838.
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