Competing Mechanism Games of Moral Hazard: Communication and Robustness

16 Pages Posted: 20 Jun 2011

See all articles by Andrea Attar

Andrea Attar

Toulouse School of Economics; University of Roma Tor Vergata

Eloisa Campioni

University of Rome Tor Vergata - Dept. of Economics and Finance

Gwenael Piaser

Universite du Luxembourg

Uday Rajan

Stephen M. Ross School of Business, University of Michigan

Date Written: June 2011

Abstract

We consider multiple-principal multiple-agent models of moral hazard: Principals compete through mechanisms in the presence of agents who take unobservable actions. In this context, we provide a rationale for restricting principals to make use of simple mechanisms, which correspond to direct mechanisms in the standard framework of Myerson (1982). Our results complement those of Han (2007) who analyzes a complete information setting where agents’ actions are fully contractible.

Keywords: Moral hazard, multiple-principal multiple-agent, simple mechanisms

JEL Classification: D82, D86

Suggested Citation

Attar, Andrea and Campioni, Eloisa and Piaser, Gwenael and Rajan, Uday, Competing Mechanism Games of Moral Hazard: Communication and Robustness (June 2011). CEIS Working Paper No. 196. Available at SSRN: https://ssrn.com/abstract=1862177 or http://dx.doi.org/10.2139/ssrn.1862177

Andrea Attar (Contact Author)

Toulouse School of Economics

21, allée de Brienne
Toulouse, F 31000
France
+33 5 61128578 (Phone)

University of Roma Tor Vergata ( email )

2 Via Columbia
00100 Rome
Italy

Eloisa Campioni

University of Rome Tor Vergata - Dept. of Economics and Finance ( email )

Italy

Gwenael Piaser

Universite du Luxembourg ( email )

148, avenue de la Faïencerie
Luxembourg, L-1511
Luxembourg
+ 352 46 66 44 6811 (Fax)

Uday Rajan

Stephen M. Ross School of Business, University of Michigan ( email )

701 Tappan Street
Ann Arbor, MI 48109
United States
734-764-2310 (Phone)

HOME PAGE: http://webuser.bus.umich.edu/urajan

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