Working Paper
The Revelation and Delegation Principles in Common Agency Games
David Martimort, Lars Stole
CESifo, Munich, 2001
CESifo Working Paper No. 575
CESifo, Munich, 2001
CESifo Working Paper No. 575
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.