Unique Implementation of Incentive Contracts with Many Agents

S-Tier
Journal: Review of Economic Studies
Year: 1988
Volume: 55
Issue: 4
Pages: 555-572

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In this paper we consider the problem of implementation when a principal hires many agents and is not able to monitor their actions. We distinguish two cases: (i) when actions are mutually observable among agents, (ii) when actions are not observable at all. In (i), there is a mechanism in which the first-best arises as a unique perfect equilibrium. In (ii), we show by two examples that typically there are multiple equilibria if the principal merely offers a set of optimal sharing rules. However, we prove that the principal can use these optimal sharing rules as a starting point and construct a multi-stage mechanism that has a unique second-best perfect Bayesian equilibrium.

Technical Details

RePEc Handle
repec:oup:restud:v:55:y:1988:i:4:p:555-572.
Journal Field
General
Author Count
1
Added to Database
2026-01-25