The Principal-Agent Matching Market

Abstract

We propose a model based on competitive markets in order to analyse an economy with several principals and agents. We model the principal-agent economy as a two-sided matching game and characterise the set of stable outcomes of this principal-agent matching market. A simple mechanism to implement the set of stable outcomes is proposed. Finally, we put forward examples of principal-agent economies where the results fit.principal-agent, moral hazard, matching, implementation