Truthful Equilibria in Generalized Common Agency Models
In this paper I discuss truthful equilibria in common agency models. Specifically, I provide general conditions under which truthful equilibria are plausible, easy to calculate and efficient. These conditions generalize similar results in the literature and allow the use of truthful equilibria in novel economic applications. Moreover, I provide two such applications. The first application is a market game in which multiple sellers sell a uniform good to a single buyer. The second application is a lobbying model in which there are externalities in contributions between lobbies. This last example indicates that externalities between principals do not necessarily prevent efficient equilibria. In this regard, this paper provides a set of conditions, under which, truthful equilibria in common agency models with externalities are efficient.