Arbeitspapier
Common agency with informed principals: Menus and signals
I analyze common agency games in which the principals, and possibly the agent, have private information. I distinguish between games in which the principals delegate the final decisions to the agent, and games in which they retain some decision power after offering their mechanisms. I show that, in contrast with mechanism design models with one informed principal, Myerson's Inscrutability Principle fails when there are many informed principals. I also find that, in contrast with common agency models with uninformed principals, the Delegation Principle (Menu Theorem) fails when principals are informed. I then focus on Perfect Bayesian Equilibria in which principals offer their mechanisms without randomizing. I characterize the outcomes of arbitrary games with delegation as outcomes of a new game in which principals offer menus and send cheap-talk signals. Next, I characterize the outcomes of arbitrary games without delegation as outcomes of a new game in which principals offer menus of direct revelation mechanisms, to which they truthfully report their types.
- Language
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Englisch
- Bibliographic citation
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Series: Discussion Paper ; No. 1541
- Classification
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Wirtschaft
Noncooperative Games
Asymmetric and Private Information; Mechanism Design
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Economics of Contract: Theory
- Subject
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common agency
informed principals
Inscrutability Principle
Delegation Principle
menus
signals
direct revelation mechanisms
- Event
-
Geistige Schöpfung
- (who)
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Galperti, Simone
- Event
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Veröffentlichung
- (who)
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Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science
- (where)
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Evanston, IL
- (when)
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2011
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Galperti, Simone
- Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science
Time of origin
- 2011