Games played through agents

Andrea Prat, Aldo Rustichini

Research output: Contribution to journalArticlepeer-review

55 Scopus citations

Abstract

We introduce a game of complete information with multiple principals and multiple common agents. Each agent makes a decision that can affect the payoffs, of all principals. Each principal offers monetary transfers to each agent conditional on the action taken by the agent. We characterize pure-strategy equilibria and we provide conditions-in terms of game balancedness-for the existence of an equilibrium with an efficient outcome. Games played through agents display a type of strategic inefficiency that is absent when either there is a unique principal or there is a unique agent.

Original languageEnglish (US)
Pages (from-to)989-1026
Number of pages38
JournalEconometrica
Volume71
Issue number4
DOIs
StatePublished - 2003

Keywords

  • Balanced games
  • Common agency

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