We analyze an abstract model of trading where N principals submit quantity-payment schedules that describe the contracts they offer to an agent, and the agent then chooses how much to trade with every principal. This represents a special class of common agency games with complete information. We study all the subgame perfect Nash equilibria of these games, not only truthful ones, providing a complete characterization of equilibrium payoffs. In particular, we show that the equilibrium that is Pareto-dominant for the principals is not truthful when there are more than two of them. We also provide a partial characterization of equilibrium strategies.
Trading with a common agent under complete information: A characterization of Nash equilibria / Chiesa G; Denicolò V.. - In: JOURNAL OF ECONOMIC THEORY. - ISSN 0022-0531. - STAMPA. - 144:(2009), pp. 296-311. [10.1016/j.jet.2008.05.005]
Trading with a common agent under complete information: A characterization of Nash equilibria
CHIESA, GABRIELLA;DENICOLO', VINCENZO
2009
Abstract
We analyze an abstract model of trading where N principals submit quantity-payment schedules that describe the contracts they offer to an agent, and the agent then chooses how much to trade with every principal. This represents a special class of common agency games with complete information. We study all the subgame perfect Nash equilibria of these games, not only truthful ones, providing a complete characterization of equilibrium payoffs. In particular, we show that the equilibrium that is Pareto-dominant for the principals is not truthful when there are more than two of them. We also provide a partial characterization of equilibrium strategies.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
