Grouping agents with persistent types

• 成果类型: Article
• 署名作者: Malcomson, James M.
• 署名单位: University of Oxford
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2025.03.008
• 发表日期: 2025
• 页码: 150-174
• 关键词: Relational incentive contracts; Persistent private information; renegotiation-proofness; Type pooling

摘要

Employees are divided into grades. Toyota places suppliers into only a small number of This paper shows that grouping of privately informed and persistent agent types arises in relational incentive contracts when agent type is continuous. Malcomson (2016) showed full separation is not possible if, following full revelation of an agent's type, payoffs for and agent are on the Pareto frontier. This paper shows how much separation can be Specifically, it characterizes the finest partitioning that can be achieved in each period types for which first-best effort is unattainable. Separation may take time, with initial partitions being subsequently refined, but does not continue indefinitely. When it stops, remain a finite number of groups of agent types. Numerical illustrations for constant cost of effort show the maximum number is typically small despite agent type being continuous.