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We study a mechanism design problem in which players can take part in a mechanism to coordinate their actions in a default game. By refusing to participate in the mechanism, a player can revert to playing the default game non-cooperatively. We show with an example that some allocation rules are implementable only with mechanisms which will be rejected on(More)
We analyze an adverse selection environment with third party supervision. We assume that the supervisor and the agent can collude while interacting with the principal. As long as the supervisor is symmetrically informed with the agent, the former's existence does not improve the principal's rent extraction. This is due to the coalitional efficiency between(More)
We consider an adverse selection environment, where an agent is able to understate his productivity, but not allowed to overstate it. We characterize the principal's optimization problem. The solution to this problem is generally different than the solution to the standard problem, where no restriction is made on the statements that the agent can make. We(More)
Integrating the planning and implementation tasks, by having one agent perform both, is an effective incentive device for encouraging planning activity whose outcome is not observable. We find that the value of information is non-monotonic in the degree of task integration, which implies that partial integration of tasks is more effective than full(More)
This paper studies a mechanism-design problem involving a principal-supervisor-agent in which collusion between supervisor and agent can only occur after they have decided to participate in the mechanism. We show how collusion can be eliminated at no cost via the use of a mechanism in which the principal endogenously determines the scope of supervision. A(More)
We study an incomplete information game in which players can coordinate their actions by contracting among themselves. We model this relationship as a reciprocal contracting procedure where each player has the ability to make commitments contingent on the other players'commitments. We characterize the outcomes that can be supported as perfect Bayesian(More)
Integrating planning and implementation, by having one agent perform both tasks, may be effective in encouraging planning activity whose outcome is not observable. Emphasizing its information generating role, we Þnd that planning activity is best encouraged by partially integrating the tasks. This is because the value of information is non-monotonic in the(More)
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