Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94014
Authors: 
Mylovanov, Tymofiy
Year of Publication: 
2005
Series/Report no.: 
SFB/TR 15 Discussion Paper 129
Abstract: 
In a principal-agent model with hidden information and no monetary transfers, I establish the Veto-Power Principle: any incentive-compatible outcome can be implemented through veto-based delegation with an endogenously chosen default decision. This result demonstrates the exact nature of commitment powers required by the principal: (1) to design the default outcome and (2) to ensure that she has almost no formal control over the agent's decisions.
Subjects: 
veto power
asymmetric information
principal-agent relationship
no monetary transfers
JEL: 
D78
D82
L22
M54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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