Trading with a common agent under complete information: A characterization of Nash equilibria
Gabriella Chiesa () and
Vincenzo Denicolo' ()
Journal of Economic Theory, 2009, vol. 144, issue 1, 296-311
We analyze an abstract model of trading where N principals submit quantity-payment schedules that describe the contracts they offer to an agent, and the agent then chooses how much to trade with every principal. This represents a special class of common agency games with complete information. We study all the subgame perfect Nash equilibria of these games, not only truthful ones, providing a complete characterization of equilibrium payoffs. In particular, we show that the equilibrium that is Pareto-dominant for the principals is not truthful when there are more than two of them. We also provide a partial characterization of equilibrium strategies.
Keywords: Common; agency; Supply; schedules; Truthful; equilibrium; Minimum; rent; equilibrium (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:144:y:2009:i:1:p:296-311
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