Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5072462 | Games and Economic Behavior | 2010 | 5 Pages |
Abstract
We provide two examples in a pure moral hazard setting with two principals and two agents. Example 1 shows that a strongly robust equilibrium in simple (direct) mechanisms can no longer be sustained as an equilibrium when a principal can deviate to an indirect communication scheme. Conversely, an equilibrium with one principal offering an indirect mechanism cannot be replicated as an equilibrium in simple mechanisms. Example 2 shows more directly that a payoff profile that can be achieved in equilibrium when one principal offers an indirect mechanism cannot be achieved as an equilibrium profile in simple mechanisms.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Andrea Attar, Eloisa Campioni, Gwenaël Piaser, Uday Rajan,