9 December 2011: How to Throw a Party: Multi-Agent Contracting with Type Dependent Externalities

Eyal Winter
Hebrew University of Jerusalem

Abstract:
We model situations in which a principal offers contracts to a group of agents to participate in a project. Agents’ benefits from participation depend on the identity of other participating agents. We assume heterogeneous externalities and characterize the optimal contracting scheme. We show that the optimal contracts' payoff relies on a ranking of the agents, which arise from a tournament among the agents. The optimal ranking cannot be achieved by a simple measure of popularity. Using the structure of the optimal contracts we derive results on the principal's revenue extraction and the role of the level of externalities asymmetry.

Date: December 9, 2011
Time: 11:30 A.M.

Venue:
Seminar Room 2
Indian Statistical Institute Delhi Centre,
7, S. J. S. Sansanwal Marg,
New Delhi-110016 (INDIA)

Location:

View Larger Map