Attar, Andrea, Campioni, Eloisa and Piaser, Gwenaël (2023) Equilibrium (non-)existence in games with competing principals. Economics Letters, vol. 222.

Abstract

We study competing-mechanism games, in which multiple principals contract with multiple agents. We reconsider the issue of non-existence of an equilibrium as first raised by Myerson (1982). In the context of his example, we establish the existence of a perfect Bayesian equilibrium. We clarify that Myerson (1982)’s non-existence result is an implication of the additional requirement he imposes, that each principal selects his preferred continuation equilibrium in the agents’ game.