Kerschbamer, R.Koray, S.2016-02-082016-02-0820011434-4742http://hdl.handle.net/11693/24768This paper studies a simple setting in which the contractual arrangements which determine the incentives for agents are not designed by a single central planner, but are themselves the outcome of a game among multiple non-cooperatively acting principals. The notion of an Epsilon Contracting Equilibrium is introduced to predict the outcome of the contract-design game among principals. Symmetric pure strategy Epsilon Contracting Equlibria may not exist in perfectly symmetric environments. In a symmetric Epsilon Contracting Equilibrium in mixed strategies coordination failure may lead to a suboptimal institutional network in which the agents "cheat" their principals. © Springer-Verlag 2001.EnglishAdverse selectionEpsilon contracting equilibriumMultiagentsMultiprincipalsArticle10.1007/PL000136931434-4750