Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130710
Authors: 
Ensthaler, Ludwig
Huck, Steffen
Leutgeb, Johannes
Year of Publication: 
2016
Series/Report no.: 
WZB Discussion Paper SP II 2016-305
Abstract: 
From the regulation of sports to lawmaking in parliament, in many situations one group of people ("agents") makes decisions that affect payoffs of others ("principals") who are inactive. As the principals have a stake in the agents' decisions they face an incentive to offer payments in order to sway their decisions. Prat and Rustichini (2003) characterize pure-strategy equilibria of such Games Played Through Agents, in which principals commit to action-contingent transfers to agents. Specifically, they predict the equilibrium outcome in pure strategies to be efficient under some conditions. With field data hard to come by, we test the theory in a series of experimental treatments with human principals and computerized agents. The theory explains the data remarkably well. Subjects predominantly offer payments that implement efficient outcomes. In some treatments offers fall short of equilibrium predictions though. These minor deviations from equilibrium behavior are explored in a quantal response equilibrium framework.
Subjects: 
games played through agents
experiment
quantal response equilibrium
Document Type: 
Working Paper

Files in This Item:
File
Size
488.27 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.