Work

Weight-Ranked Divide-and-Conquer Contracts

Year: 2021

Type: article

Abstract: This paper studies a large class of multi-agent contracting models with the property that agents' payoffs constitute a weighted potential game. Multiple equilibria arise due to agents' strategic interactions. I fully characterize a contracting scheme that is optimal for the principal for a large class of equilibrium selection criteria and implementation requirements. This scheme ranks agents in ascending order of their weights in the weighted potential game and then induces them to accept their offers in a dominance-solvable way, starting from the first agent. I apply the general results to networks and pure/impure public goods/bads.

Source: Theoretical Economics

DOI: 10.2139/ssrn.3780434

Author: Lester T. Chan

Institutions: Xiamen University, Southern University of Science and Technology

Language: English

Topic: Game Theory and Applications

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

Open Access status: diamond

Funder: National Natural Science Foundation of China

OpenAlex ID: W4413079818

FWCI: 0.15

Cites: 39

Cited by: 7

Related to: 10