Efficient Teamwork

Our goal is to solve both problems of adverse selection and moral hazard for multi-agent projects. In our model, each selected agent can work according to his private "capability tree". This means a process involving hidden actions, hidden chance events and hidden costs in a dynamic manner, and providing contractible consequences which are affecting each other's working process and the outcome of the project. We will construct a mechanism that induces truthful revelation of the agents' capability trees and chance events and to follow the instructions about their hidden decisions. This enables the planner to select the optimal subset of agents and obtain the efficient joint execution. We will construct another mechanism that is collusion-resistant but implements an only approximately efficient outcome. The latter mechanism is widely applicable, and the major application details will be elaborated.