Multiprincipals multiagents incentive design (Q5944738)

The authors study the design of incentives through contractual arrangements in a model consisting of two ex ante identical principal-agent pairs. The notion of an epsilon contracting equilibrium has been introduced to predict the outcome of the principals contract game, which enables to approximate the discontinuities of payoff functions. It is also shown that in spite of the symmetric structure of the principals game, there is no symmetry in pure strategies. A number of theorems and propositions are established for the solution. No experiments are presented in the paper.