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

Brian Roberson

Purdue University Economics Working Papers from Purdue University, Department of Economics

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.

Pages: 31 pages
Date: 2026-02
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Persistent link: https://EconPapers.repec.org/RePEc:pur:prukra:1356

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