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The Revelation and Delegation Principles in Common Agency Games

19 Pages Posted: 30 Oct 2001  

David Martimort

University of Toulouse 1 - Industrial Economic Institute (IDEI); CESifo (Center for Economic Studies and Ifo Institute)

Lars Stole

University of Chicago - Booth School of Business

Date Written: October 2001

Abstract

In the context of common agency adverse-selection games we illustrate that the revelation principle cannot be applied to study equilibria of the multi-principal games. We then demonstrate that an extension of the taxation principle - what we term the delegation principle - can be used to characterize the set of all common agency equilibria.

Keywords: Revelation Principle, Delegation Principle, Taxation Principle, Common Agency, Adverse Selection

JEL Classification: D82, L51

Suggested Citation

Martimort, David and Stole, Lars, The Revelation and Delegation Principles in Common Agency Games (October 2001). CESifo Working Paper Series No. 575. Available at SSRN: https://ssrn.com/abstract=287118

David Martimort

University of Toulouse 1 - Industrial Economic Institute (IDEI) ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Lars A. Stole (Contact Author)

University of Chicago - Booth School of Business ( email )

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Chicago, IL 60637
United States
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