Contracting on Networks

Mohamed Belhaj () and Frédéric Deroïan ()

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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: network; strategic complementarity; enforceability; optimal contracting; multi-agency (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-cta, nep-ger, nep-hrm, nep-mic and nep-net
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01102403v1
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Contracting on Networks (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-01102403

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