Maskin, Eric; Tirole, Jean - In: Econometrica 60 (1992) 1, pp. 1-42
A principal has private information that directly affects her agent's payoff (i.e., "common values" obtains). The authors analyze their relationship as a three-stage game: (1) the principal proposes a contract; (2) the agent accepts or rejects; and (3) the contract is executed. They show that...