Common agency with informed principals

David Martimort and Humberto Moreira ()

No 551, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: We analyze a common agency game under asymmetric information on the preferences of the non-cooperating principals in a public good context. Asymmetric information introduces incentive compatibility constraints which rationalize the requirement of truthfulness made in the earlier literature on common agency games under complete information. There exists a large class of differentiable equilibria which are ex post inefficient and exhibit free-riding. We then characterize some interim efficient equilibria. Finally, there exists also a unique equilibrium allocation which is robust to random perturbations. This focal equilibrium is characterized for any distribution of types.

Date: 2004-06-01
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Citations: View citations in EconPapers (9)

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