Incomplete Information VCG Contracts for Common Agency

Alon, Tal; Talgam-Cohen, Inbal; Lavi, Ron; Shamash, Elisheva

Abstract

The “common agency” model, introduced by Bernheim and Whinston in 1986 combines the fundamental challenge of the principal–agent model with the challenges of coordinating multiple principals. In “Incomplete information VCG contracts for common agency,” Alon, Talgam-Cohen, Lavi, and Shamash show that the class of common agency settings for which there exists a contract that guarantees truthfulness of all principals, welfare maximization, and the two standard properties from contract theory—limited liability for the agent and individual rationality for the principals—is identifiable by a polynomial-time algorithm. Furthermore, for these settings, the authors design a polynomial-time computable contract: given valuation reports from the principals, it returns, if possible for the setting, a payment scheme for the agent that constitutes a contract with all desired properties.

Citation

Alon, T., Talgam-Cohen, I., Lavi, R., & Shamash, E. (in press). Incomplete Information VCG Contracts for Common Agency. Operations Research, https://doi.org/10.1287/opre.2023.2475

• Journal Article Type: Article
• Acceptance Date: Jul 18, 2023
• Online Publication Date: Jul 18, 2023
• Deposit Date: Aug 1, 2023
• Publicly Available Date: Aug 1, 2023
• Journal: Operations Research
• Print ISSN: 0030-364X
• Electronic ISSN: 1526-5463
• Publisher: INFORMS
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1287/opre.2023.2475
• Keywords: Management Science and Operations Research, Computer Science Applications
• Related Public URLs: https://researchportal.bath.ac.uk/en/publications/incomplete-information-vcg-contracts-for-common-agency