On the Consistency of the First-Order-Approach to Principal-Agent Problems

Óscar Gutiérrez

doi:10.4236/tel.2012.22028

On the Consistency of the First-Order-Approach to Principal-Agent Problems

Theoretical Economics Letters ◽

10.4236/tel.2012.22028 ◽

2012 ◽

Vol 02 (02) ◽

pp. 157-161 ◽

Cited By ~ 2

Author(s):

Óscar Gutiérrez

Keyword(s):

Principal Agent ◽

First Order

Download Full-text

The first-order approach to the principal–agent problems under inequality aversion

Operations Research Letters ◽

10.1016/j.orl.2013.06.012 ◽

2013 ◽

Vol 41 (5) ◽

pp. 526-529 ◽

Cited By ~ 6

Author(s):

Susumu Cato

Keyword(s):

Inequality Aversion ◽

Principal Agent ◽

First Order

Download Full-text

Principals and Agents: From the Convention’s Proposal to the Constitutional Treaty

Reforming the European Union ◽

10.23943/princeton/9780691153926.003.0007 ◽

2012 ◽

Author(s):

Thomas König ◽

Daniel Finke

Keyword(s):

Final Outcome ◽

The Political ◽

Principal Agent ◽

Constitutional Treaty ◽

Political Leaders ◽

Voting Rules ◽

Common View ◽

Treaty Of Lisbon ◽

First Order ◽

The Common

This chapter examines the transformation of the Convention's proposal on the Treaty Establishing a Constitution for Europe to the Lisbon Treaty in the aftermath of the two negative referendums from a principal-agent perspective. It shows that the common view of unitary member states, in which principals and agents share interests in the revision of treaties, can only partially—if not wrongly—explain the Treaty of Lisbon. The principal-agent analysis reveals that the political leaders delegated power to negotiating agents who worked out compromise solutions by partially revising the initial interests of their first order principals, the political leaders. Governmental agents from smaller countries were able to focus the negotiations on a few central reform issues, such as the number of Commissioners and the voting rules of the Council, and they also successfully influenced the final outcome of these issues. A major reason for their success was their credibility, which they could increase by pointing to integration-skeptic voters—particularly in countries that had announced a referendum. Hence, governmental agents increased their bargaining efficiency by referring to voters as their second-order principals.

Download Full-text