Repeated delegation

DOI10.1016/J.JET.2020.105040MaRDI QIDQ785526zbMATH OpenOpenAlexFDO

Authors Elliot Lipnowski, João Daniel Palma Ramos

Publication date 7 August 2020

Published in Journal of Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/j.jet.2020.105040

zbMATH Keywords

capital budgetingdelegationlimited commitmentrepeated game

Mathematics Subject Classification ID

Multistage and repeated games (91A20) Discrete-time games (91A50) Applications of game theory (91A80) Decision theory (91B06) Principal-agent models (91B43)

Review text

The authors study properties of the following economic model. ``We consider an infinite-horizon game played between a principal P and an agent A, time is discrete. The principal and the agent play the same stage game in every period. Each period the principal chooses whether or not to delegate a project adoption choice to the agent, i.e. P publicly decides whether to freeze project adoption or to delegate it. If P freezes the project, then no project is adopted and the payoff of both players is zero. If P delegates the project, then A decides whether or not to initiate it. The current period's project is good with a given probability and bad with complement probability. P prefers good projects to nothing, but prefers inactivity to bad projects. The authors characterize equilibrium payoffs at fix discounting and show that Pareto optimal equilibria are implemented.

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Cites work

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Cited in

(20)

• Information revelation in repeated delegation
• Community repeated interaction and strategic delegation
• A theory of dynamic contracting with financial constraints
• On the value of repetition for communication games
• Dynamic monitoring under resource constraints
• Regular equilibria and negative welfare implications in delegation games
• Goodwill in communication
• (Not) delegating decisions to experts: the effect of uncertainty
• Delegation equilibrium payoffs in integer-splitting games
• Discounted quotas
• Delegating decisions in strategic settings
• Optimal Delegation
• Monotone contracts
• Dynamic delegation with a persistent state
• When to ask for an update: timing in strategic communication
• Delegating trial and error
• Marginal reputation
• Screening for breakthroughs
• Delegation and commitment in durable goods monopolies
• Veto-based delegation

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