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Common Agency with Informed Principals: Menus and Signals

Abstract

This paper considers games in which multiple informed principals simultaneously compete to in‡uence the decisions of a common agent. The paper focuses on the problem of characterizing equilibrium outcomes of such games. It notes that, to solve this problem, one can invoke neither Myerson'’s Inscrutability Principle, valid in agency games with one informed principal, nor the Delegation Principle, valid in common-agency games with uninformed principals. Nonetheless, the paper provides two approaches to characterize all equilibrium outcomes: one for games in which principals delegate the …nal decisions to the
agent, and one for games in which they participate with the agent in making such decisions.


(revised version)
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simone galperti,
Nov 18, 2013, 8:37 AM