Existence of equilibrium in common agency games with adverse selection

Guilherme Carmona and Jose Santiago Fajardo Barbachan ()

Games and Economic Behavior, 2009, vol. 66, issue 2, pages 749-760

Abstract: We establish the existence of subgame perfect equilibria in general menu games, known to be sufficient to analyze common agency problems. Our main result states that every menu game satisfying enough continuity properties has a subgame perfect equilibrium. Despite the continuity assumptions that we make, discontinuities naturally arise due to the absence, in general, of continuous optimal choices for the agent. Our approach, then, is based on (and generalizes) the existence theorem of [Simon, L., Zame, W., 1990. Discontinuous games and endogenous sharing rules. Econometrica 58 (4), 861-872] designed for discontinuous games.

Keywords: Common; agency; Menu; games; Subgame; perfect; equilibrium (search for similar items in EconPapers)
Date: 2009

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Related works:
Working Paper: Existence of Equilibrium in Common Agency Games with Adverse Selection (2006)
Working Paper: Existence of Equilibrium in Common Agency Games with Adverse Selection (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:gamebe:v:66:y:2009:i:2:p:749-760

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