Existence of Equilibrium Mechanisms in Generalized Principal Agent Problems with Interacting Teams

Brian Roberson ()
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Brian Roberson: Purdue University, Department of Economics and Economic Science Institute, Chapman University

Working Papers from Chapman University, Economic Science Institute

Abstract: We study incentive design when multiple principals simultaneously design mechanisms for their respective teams in environments with strategic spillovers. In this environment, each principal’s set of incentive-compatible mechanisms—those that satisfy their own agents’ incentive compatibility constraints— depends on the mechanisms offered by the other teams. Following a classic example by Myerson (1982), such games may lack equilibrium due to discontinuities in the correspondence of incentive-compatible mechanisms. We establish general conditions for equilibrium existence by introducing a novel approach that involves tracking both the outcome distributions along the truthful-obedient path and the sets of outcome distributions achievable through unilateral deviations, thereby providing a foundation for analyzing a wide range of multi-principal mechanism design with team production and agency problems.

Keywords: Mechanism Design; Principal-Agent Problems; Equilibrium Existence; Generalized Games; Multiple Principals; Stochastic Production; Team Production (search for similar items in EconPapers)
JEL-codes: C72 D82 D86 L13 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:26-02

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