Rivalry among agents seeking large budgets

Kimiko Terai, Amihai Glazer

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

An agent competing for resources from a principal may benefit from having the principal believe that the agent shares his preferences, whereas the principal may prefer that agents reveal their types, inducing a separating equilibrium. Such incentives are explored in a model with a principal who sets a budget in two separate periods, and two different agents allocate that budget among services. In the second period, the principal allocates a larger budget to the agent that he believes is more likely to share his preferences. In the first period, each agent may behave strategically, spending more on the service the principal prefers, thereby hiding the agent’s type; this benefits the principal in the current period, but hurts him in the future because he does not know which agent would spend in the way he prefers. The principal may induce separation by giving the agents a large budget in the initial period, or by hiding his preferences from them.

Original languageEnglish
JournalJournal of Theoretical Politics
DOIs
Publication statusAccepted/In press - 2018 Jan 1

Fingerprint

budget
incentive
resources

Keywords

  • Budget
  • bureaucrats
  • delegation
  • hidden information
  • reputation

ASJC Scopus subject areas

  • Sociology and Political Science

Cite this

Rivalry among agents seeking large budgets. / Terai, Kimiko; Glazer, Amihai.

In: Journal of Theoretical Politics, 01.01.2018.

Research output: Contribution to journalArticle

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