CIRJE-F-401 | "Role of Linking Mechanisms in Multitask Agency with Hidden Information" |
Author Name | Matsushima, Hitoshi, Koichi Miyazaki and Nobuyuki Yagi |
Date | February 2006 |
Full Paper | PDF file@ |
Remarks | @Revised as CIRJE-F-721 (2010). |
Abstract |
We investigate the adverse selection problem where a principal delegates multiple tasks to
individuals. The individuals form a group as a single agent and share their private signals in
order to maximize their average payoff. We characterize the virtually implementable social
choice functions by using the linking mechanism proposed by Jackson and Sonnenschein (2005)
that restricts the message spaces. The principal does not require any incentive wage schemes
and can therefore avoid any information rent and welfare loss due to risk aversion. We show the
resemblance between the functioning of this message space restriction and that of incentive
wage schemes.
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