In a class of informed principal problems with common values, we define iteratively a particular allocation which we call the assured allocation. It is comparatively easy to calculate and straightforward to interpret. It always exists, is unique and continuous in the priors. It is undominated,...

This paper considers general games in which multiple informed principals simultaneously compete to influence the decisions of a common agent. It shows that we can characterize all outcomes of any game in which principals delegate the final decisions to the agent using arbitrary mechanisms, by...

A class of employment contracts entailing production targets and consequent rewards is studied. In a nondiscriminatory environment, a principal hiring many agents faces the problem of writing a common contract which induces the highest possible effort from each one of his agents. While a very...

We show that a solution to the problem of mechanism selection by an informed principal exists in a large class of environments with “generalized private values”: the agents’ payoff functions are independent of the principal’s type. The solution is an extension of Maskin and Tirole’s...

We propose a theory explaining the shape of contracts between local governments and the contractors they hire to run public facilities on their behalf. Governments are privately informed over the quality of the facility and risk-averse while risk-neutral contractors are subject to a moral hazard...

In this paper we analyze a simple two-sided adverse selection model with one principaland one agent. They are both risk neutral and have private information about their type.We also assume that the private information of the principal is correlated with the one ofthe agent. The main result of...

We investigate the costs and benefits of managerial interventions with a team in which workers care to different degrees about output. We show that if there are complementarities in production and if the team manager has some information about team members, interventions by the manager may have...

In a principal–agent model with moral hazard, a signal about the principalʼs technology — the stochastic mapping from the agentʼs action to the outcome — is observed before the contract is offered. The signal is either uninformative (null information), informative and observed only by...

<Para ID="Par1">We introduce a “nestedness” relation for a general class of sender–receiver games and compare equilibrium properties, in particular the amount of information transmitted, across games that are nested. Roughly, game <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$B$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mi>B</mi> </math> </EquationSource> </InlineEquation> is nested in game <InlineEquation ID="IEq2"> <EquationSource Format="TEX">$$A$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mi>A</mi> </math> </EquationSource> </InlineEquation> if the players’ optimal...</equationsource></equationsource></inlineequation></equationsource></equationsource></inlineequation></para>