Common agency games: Indifference and separable preferences

Attar, Andrea; Majumdar, Dipjyoti; Piaser, Gwenaël; Porteiro, Nicolás

doi:10.1016/j.mathsocsci.2007.11.001

Cited by 8 publications

(23 citation statements)

References 23 publications

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“…At this point, it is useful to contrast our results with those in Peters (2003Peters ( , 2007 and Attar et al (2008). Peters (2003Peters ( , 2007 considers environments in which a certain "no-externality condition" holds and shows that in these environments all pure-strategy equilibria can be characterized by restricting the principals to offering standard direct revelation mechanisms ϕ i : Θ →  i .…”

Section: Can Also Be Sustained By a Pure-strategy Equilibrium In Whmentioning

confidence: 99%

“…This is the intrinsic nature of the common agency problem which leads to the failure of the standard Revelation Principle. On the other hand, it does not seem plausible that, for a given contract with seller j, the purchase from seller i would 7 A special case is when preferences are separable, as in Andrea Attar et al (2008), in which case they depend only on the agent's exogenous type.…”

Section: Truthful Revelation Mechanisms For Simultaneous Commonmentioning

confidence: 99%

“…The policymaker must choose between a "protectionist" policy, e = p, and a "free-trade" policy, e = f (e.g., opening the domestic market to foreign competition). To influence the policymaker's decision, the two firms can 10 Note that this refinement is milder than the "conservative behavior" refinement of Attar et al (2008).…”

Section: A Simple Menu-auction Examplementioning

confidence: 99%

“…20 The no-externality condition requires that (i) each principal's payoff be independent of the other principals' actions a −i , and (ii) conditional on choosing effort in a certain equivalence class ˆ E , 21 the agent's preferences over any set of actions B ⊆  i by principal i be independent of the particular effort the agent chooses in ˆ E , of his type θ, and of the other principals' actions a −i . Attar et al (2008) show that in environments in which only deterministic contracts are feasible, all action spaces are finite, and the agent's preferences are "separable" and "generic," condition (i) in Peters (2003) can be dispensed with: any equilibrium outcome of the menu game (including those sustained by mixed strategies) can also be sustained as an equilibrium outcome in the game in which the principals' strategy space consists of all standard direct revelation mechanisms. Separability requires that the agent's preferences over the actions of any of the principals be independent of the effort choice and of the actions of the other principals.…”

Section: Can Also Be Sustained By a Pure-strategy Equilibrium In Whmentioning

confidence: 99%

“…Problems with the Revelation Principle in games with competing principals have been documented in Michael L. Katz (1991), R. Preston McAfee (1993), James Peck (1997), Larry Epstein and Michael Peters (1999), Peters (2001), and David Martimort andLars Stole (1997, 2002), among others. Recent work by Peters (2003Peters ( , 2007; Andrea Nicolàs Porteiro (2007a, 2007b); and Attar et al (2008) has identified special cases in which these problems do not emerge. 3 Depending on the application of interest, a contract can be a price-quantity pair, as in the case of competion in nonlinear tariffs; a multidimensional bid, as in menu auctions; or an incentive scheme, as in moral hazard settings.…”

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confidence: 99%

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Truthful Revelation Mechanisms for Simultaneous Common Agency Games

Pavan

Calzolari

2010

American Economic Journal: Microeconomics

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Many economic environments can be modelled as common agency games-that is, games where multiple principals contract simultaneously and noncooperatively with the same agent. 1Despite their relevance for applications, the analysis of these games has been made difficult by the fact that one cannot safely assume that the agent selects a contract with each principal by simply reporting his "type" (i.e., his exogenous payoff-relevant information). In other words, the central tool of mechanism design theory-the Revelation Principle-is invalid in these games. 2 The reason is that the agent's preferences over the contracts offered by one principal depend not only on his type, but also on the contracts he has been offered by the other principals. We refer to the players who offer the contracts either as the principals or as the mechanism designers. The two expressions are intended as synonyms. Furthermore, we adopt the convention of using feminine pronouns for the principals and masculine pronouns for the agent. Depending on the application of interest, a contract can be a price-quantity pair, as in the case of competion in nonlinear tariffs; a multidimensional bid, as in menu auctions; or an incentive scheme, as in moral hazard settings. * Pavan: Department of Economics, Northwestern University, 2001 Sheridan Road Arthur Andersen Hall 329 Evanston, IL 60208-2600 (e-mail: alepavan@northwestern.edu). Calzolari: Department of Economics University of Bologna, Piazza Scaravilli 2 40126 Bologna Italy and CEPR (e-mail: giacomo.calzolari@unibo.it). This is a substantial revision of an earlier paper that circulated under the same title. For useful discussions, we thank seminar participants at various conferences and institutions where this paper has been presented. A special thank is to Eddie Dekel, Mike Peters, Marciano Siniscalchi, Jean Tirole, and three anonymous referees for suggestions that helped us improve the paper. We are grateful to Itai Sher for excellent research assistance. For its hospitality, Pavan also thanks Collegio Carlo Alberto (Turin), where this project was completed.† To comment on this article in the online discussion forum, or to view additional materials, visit the articles page at http://www.

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Section: Can Also Be Sustained By a Pure-strategy Equilibrium In Whmentioning

confidence: 99%

Section: Truthful Revelation Mechanisms For Simultaneous Commonmentioning

confidence: 99%

Section: A Simple Menu-auction Examplementioning

confidence: 99%

Section: Can Also Be Sustained By a Pure-strategy Equilibrium In Whmentioning

confidence: 99%

mentioning

confidence: 99%

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Truthful Revelation Mechanisms for Simultaneous Common Agency Games

Pavan

Calzolari

2010

American Economic Journal: Microeconomics

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The potential of iterative voting to solve the separability problem in referendum elections

Bowman

Hodge

2013

Theory Decis

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On take it or leave it offers in common agency

Han

2012

Economics Letters

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If the agent's preference relation satisfies a strict monotonicity condition in common agency under the asymmetric information, the set of all equilibrium allocations in the menu game where menus of contracts are allowed coincides with the set of all equilibrium allocations in the single contract game where only single contracts are allowed. * This paper supersedes the paper "Competition relative to Incentive Contracts in Common Agency." It is based on my research during the sabbatical visit to Boston University. I thank their hospitality. I also thank seminar audience at Boston University and University of Western Ontario for their comments. I thankfully acknowledge financial support from SSHRC of Canada.

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Common agency games: Indifference and separable preferences

Cited by 8 publications

References 23 publications

Truthful Revelation Mechanisms for Simultaneous Common Agency Games

Truthful Revelation Mechanisms for Simultaneous Common Agency Games

The potential of iterative voting to solve the separability problem in referendum elections

On take it or leave it offers in common agency

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