Games with Externalities and Delegation to a Common Agent

Tusiad-Koc University Economic Research Forum Working Paper No. 0710

36 Pages Posted: 31 Dec 2007

See all articles by Emanuele Gerratana

Emanuele Gerratana

Columbia University - School of International & Public Affairs (SIPA)

Date Written: September 2007

Abstract

I present a model in which the players of a game have the option to delegate parts of their strategies to a third party who has an interest in the outcome of the game. I analyze whether the game with delegation to a common agent improves over the equilibrium of the original game. This paper contributes to the literature on private common agency and to the failure of the revelation principle with multiple principals. One contribution of this paper is the characterization of the complete set of equilibrium outcomes for the game with delegation, including the asymmetric outcomes. I also provide an answer to the question whether the results of the existing models of private common agency are robust to mixed strategy deviations and shed light on the persistence of the failure of revelation principle.

Keywords: Common Agency Games, Delegation, Revelation Principle, Games with Externalities

JEL Classification: C72, D74, D86

Suggested Citation

Gerratana, Emanuele, Games with Externalities and Delegation to a Common Agent (September 2007). Tusiad-Koc University Economic Research Forum Working Paper No. 0710, Available at SSRN: https://ssrn.com/abstract=1079642 or http://dx.doi.org/10.2139/ssrn.1079642

Emanuele Gerratana (Contact Author)

Columbia University - School of International & Public Affairs (SIPA) ( email )

420 West 118th Street
New York, NY 10027
United States

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