Monitoring Cooperative Agreements between Principals and Agents.
Abstract
The situation in which the principal-agent relationship is repeated finitely many times (T) is formulated as a sequential game. For any cooperative arrangement in the one-period game that dominates a one-period Nash equilibrium, a family of sequential strategy pairs is constructed with the property that, for any positive epsilon there is a strategy pair in the family such that, for sufficiently large T, the strategy pair is a perfect (noncooperative) epsilon equilibrium of the T-period game, and yields each player an average expected utility per period that is within epsilon of his expected utility in the one-period cooperative arrangement. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 01, 1979
- Accession Number
- ADA068724
Entities
People
- Roy Radner
Organizations
- Harvard University