We study a dynamic principal-agent model in which the principal is a group whose members hold heterogeneous and evolving values from an agreement with the agent. Learning about the agent’s private information reduces the principals’ conflicts over their joint offer, mitigating a principal’s losses if she is not decisive over future offers. As a consequence, a principal in a group prefers to screen the agent more aggressively than a single principal. We study the dynamics of the principals’ collective choice, and obtain conditions under which decisive members of the group successively trade away their decision-making authority, leading inexorably to the concentration of negotiation power in the hands of a single principal.
Download the paper in PDF format
Vincent Anesi and Peter Buisseret
View all NICEP working papers
糖心原创 Law and Social Sciences Building University Park Nottingham, NG7 2RD
telephone: +44 (0)115 84 68135 email: nicep@nottingham.ac.uk