Sequential contracting with multiple principals

Sequential contracting with multiple principals

This paper considers dynamic games in which multiple principals contract sequentially and noncooperatively with the same agent. We first show that when contracting is private, i.e. when downstream principals do not observe the mechanisms offered upstream and the decisions taken in these mechanisms, all PBE outcomes can be characterized through pure-strategy profiles in which the principals offe...

Venture Capitalists As Principals: Contracting, Screening, and Monitoring

Multiple Principals and Outside Information in Bureaucratic Policy Making

I examine a model in which a bureaucrat performs a project for multiple legislative principals. The cost of the project is publicly observable but the bureaucrat’s (exogenous) efficiency and (endogenous) cost reducing activities are not. The principals can each perform a costly audit of the bureaucrat’s type for use in the design of incentive schemes, and the information may also be useful for ...

Multiple Principals and Oversight of Bureaucratic Policy-making

I examine a model in which multiple legislative principals monitor a bureaucratic agent’s implementation of a project. The principals can each perform oversight of the implementation to limit information asymmetries exploited by the agent. Oversight is costly to perform and due to information leakages between principals, oversight by one principal reveals information to all principals. Thus for...

On the optimality of privacy in sequential contracting

This paper studies the exchange of information between two principals who contract sequentially with the same agent, as in the case of a buyer who purchases from multiple sellers. We show that when (a) the upstream principal is not personally interested in the downstream level of trade, (b) the agent’s valuations are positively correlated, and (c) preferences in the downstream relationship are ...