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Common Agency with Informed Principals: Menus and Signals

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  • Simone Galperti

Abstract

In this paper I consider games in which multiple informed principals simultaneously compete to influence the decisions of a common agent. I focus on the problem of characterizing the equilibrium outcomes of such games. I first show that, to solve this problem, one can invoke neither Myerson’s Inscrutability Principle, which holds in agency games with one informed principal, nor the Extended Taxation Principle, which holds in common-agency games with uninformed principals. I then provide two characterizations of the equilibrium outcomes: one for games in which the principals delegate the final decisions to the agent, and one for games in which they participate with the agent in making such decisions. JEL Classification Numbers: C72, D82, D83, D86

Suggested Citation

  • Simone Galperti, 2011. "Common Agency with Informed Principals: Menus and Signals," Discussion Papers 1541, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1541
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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 principals; Inscrutability Principals; Extended Taxation Principle; menus; signals; direct mechanisms Principle; menus; signals; direct revelation mechanisms.;
    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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