Robust contracts in common agency

• 成果类型: Article
• 署名作者: Marku, Keler; Ocampo, Sergio; Tondji, Jean-Baptiste
• 署名单位: Western University (University of Western Ontario); University of Texas System; University of Texas Rio Grande Valley
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12463
• 发表日期: 2024
• 页码: 199-229
• 关键词: equilibrium; provision; auctions

摘要

Business activities often involve a common agent managing a variety of projects on behalf of investors with potentially conflicting interests. The extent of the agent's actions is also often unknown to investors, who have to design contracts that provide incentives to the manager despite this lack of crucial knowledge. We consider a game between several principals and a common agent, where principals know only a subset of the actions available to the agent. Principals demand robustness and evaluate contracts on a worst-case basis. This robust approach allows for a crisp characterization of the equilibrium contracts and payoffs and provides a novel proof of equilibrium existence in common agency by constructing a pseudo-potential for the game. Robust contracts make explicit how the efficiency of the equilibrium outcome relative to collusion among principals depends on the principals' ability to extract payments from the agent.