Role of linking mechanisms in multitask agency with hidden information

Hitoshi Matsushima, Koichi Miyazaki and Nobuyuki Yagi

Journal of Economic Theory, 2010, vol. 145, issue 6, 2241-2259

Abstract: We investigate the adverse selection problem where a principal delegates multiple tasks to an agent. We characterize the virtually implementable social choice functions by using the linking mechanism proposed by Jackson and Sonnenschein (2007) [20] that restricts the message spaces. The principal does not require any incentive wage schemes and can therefore avoid any information rent and welfare loss. We show the resemblance between the functioning of this message space restriction and that of incentive wage schemes. We also extend the results of the single-agent model to the multi-agent model.

Keywords: Multitask; agency; Hidden; information; No; side; payments; Linking; mechanisms; Characterization; Full; surplus; extraction (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (6)

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Working Paper: Role of Linking Mechanisms in Multitask Agency with Hidden Information (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:145:y:2010:i:6:p:2241-2259

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