Common Agency Games with Separable Preferences

Abstract

This paper examines the role of direct mechanisms in common agency games. We focus on pure strategies and deterministic contracts and show how the introduction of a separability condition on the preferences of the agent is sufficient for the Revelation Principle to hold in in this setting, when finite generic games are considered. The result goes through without imposing any restriction on the principals' payoffs. Therefore, it is still possible to restrict attention to direct mechanisms without any loss of generality even when competition over contracts is considered.

Keywords: Revelation Principle, Common Agency, Separable Preferences

JEL Classification: D82