Agency Problems and Commitment in Delegated Bargaining

Hongbin Cai () and Walter Cont

Journal of Economics & Management Strategy, 2004, vol. 13, issue 4, 703-729

Abstract: In the context of (one‐sided) delegated bargaining, we analyze how a principal (a seller) should design the delegation contract in order to provide proper incentives for her delegate (an intermediary) and gain strategic advantage against a third party (a buyer). We consider situations in which there are both moral hazard and adverse selection problems in the delegation relationship and where the seller tries to gain strategic advantage by imposing a minimum price above which she pays the delegate a commission. It is shown that incentives and commitment are substitutes. A low‐type agent is given less discretion in dealing with the buyer and weaker incentives, while a high‐type agent is given more discretion and stronger incentives.

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://doi.org/10.1111/j.1430-9134.2004.00029.x

Related works:
Working Paper: Agency Problems and Commitment in Delegated Bargaining (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:13:y:2004:i:4:p:703-729

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1

Access Statistics for this article

More articles in Journal of Economics & Management Strategy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().