Contracting on Networks

Mohamed Belhaj () and Frédéric Deroïan ()

No 1501, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: A principal offers bilateral contracts to a set of agents organized in a network conveying synergies, in a context where agents' efforts are observable and where the principal's objective increases with the sum of efforts. We characterize optimal contracts as a function of agents' positions on the network. The analysis shows that contract enforceability is key to understand optimality. We also examine linear contracting and we analyze the situation where the principal is constrained to contract with a single agent on the network. Last, we extend this setting to network entry.

Keywords: optimal contracting; multi-agency; Network; Strategic Complementarity; enforceability (search for similar items in EconPapers)
JEL-codes: C72 D85 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2015-01-12
New Economics Papers: this item is included in nep-gth, nep-mic and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Contracting on Networks (2015)
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