| By: |
Ensthaler, Ludwig;
Huck, Steffen;
Leutgeb, Johannes |
| 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. |
| Keywords: |
games played through agents,experiment,quantal response equilibrium |
| Date: |
2016 |
| URL: |
http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2016305&r=spo |