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In the context of common agency adverse-selection games weillustrate that the revelation principle cannot be applied to studyequilibria of the multi-principal games. We then demonstrate thatan extension of the taxation principle what we term the delegation principle can be used to characterize...
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This paper characterizes the equilibrium sets of an intrinsic common agency game with direct exter-nalities between principals both under complete and asymmetric information. Direct externalities arise when the contracting variable of one principal affects directly the other principal s payoff....
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behavior. These features include: (1) physicians can choose a payment contract from a menu that includes an enhanced fee …-for-service contract and a blended capitation contract; (2) the capitation rate is higher and the cost-reimbursement rate is lower in the … blended capitation contract; (3) physicians sort selectively into the contracts based on their preferences; and (4) physicians …
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We show that prices and incentives recommended by the salesforce literature when targeting a profitable segment can attract unprofitable customers, particularly when salespeople have high productivity and low risk (i.e., risk aversion times uncertainty). Therefore, when customers are...
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