Strategic Consensus

Jayasri Dutta; TS Aidt

doi:10.1016/j.jmateco.2003.11.012

Strategic Consensus

Jayasri Dutta, TS Aidt

Economics

Research output: Contribution to journal › Article

2 Citations (Scopus)

Abstract

We Study equilibrium retention rules in a dynamic common agency game. The decision to reappoint or not is made by a committee consisting of two principals: the retention decision is uncertain if the two principals disagree. We demonstrate that all equilibrium paths exhibit what we call strategic consensus: the agent takes actions that satisfy the performance standards of all principals on the one hand, and all principals lower their standards such that the agent wants to satisfy them on the other. This result applies both to economies with sub- and super-additive costs of providing utilities to the principals. (C) 2004 Elsevier B.V. All rights reserved.

Original language	English
Pages (from-to)	227-245
Number of pages	19
Journal	Journal of Mathematical Economics
Volume	40
DOIs	https://doi.org/10.1016/j.jmateco.2003.11.012
Publication status	Published - 1 Jan 2004

Keywords

common agency
retention rules
uncertainty

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10.1016/j.jmateco.2003.11.012

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abstract = "We Study equilibrium retention rules in a dynamic common agency game. The decision to reappoint or not is made by a committee consisting of two principals: the retention decision is uncertain if the two principals disagree. We demonstrate that all equilibrium paths exhibit what we call strategic consensus: the agent takes actions that satisfy the performance standards of all principals on the one hand, and all principals lower their standards such that the agent wants to satisfy them on the other. This result applies both to economies with sub- and super-additive costs of providing utilities to the principals. (C) 2004 Elsevier B.V. All rights reserved.",

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AB - We Study equilibrium retention rules in a dynamic common agency game. The decision to reappoint or not is made by a committee consisting of two principals: the retention decision is uncertain if the two principals disagree. We demonstrate that all equilibrium paths exhibit what we call strategic consensus: the agent takes actions that satisfy the performance standards of all principals on the one hand, and all principals lower their standards such that the agent wants to satisfy them on the other. This result applies both to economies with sub- and super-additive costs of providing utilities to the principals. (C) 2004 Elsevier B.V. All rights reserved.

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KW - uncertainty

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JO - Journal of Mathematical Economics

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ER -

Strategic Consensus

Abstract

Keywords

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