Premium
Games Played Through Agents
Author(s) -
Prat Andrea,
Rustichini Aldo
Publication year - 2003
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.1111/1468-0262.00437
Subject(s) - inefficiency , outcome (game theory) , principal (computer security) , action (physics) , mathematical economics , microeconomics , economics , extensive form game , complete information , computer science , repeated game , game theory , computer security , physics , quantum mechanics
We introduce a game of complete information with multiple principals and multiple common agents. Each agent makes a decision that can affect the payoffs of all principals. Each principal offers monetary transfers to each agent conditional on the action taken by the agent. We characterize pure‐strategy equilibria and we provide conditions—in terms of game balancedness—for the existence of an equilibrium with an efficient outcome. Games played through agents display a type of strategic inefficiency that is absent when either there is a unique principal or there is a unique agent.