A general Lagrangian approach for non-concave moral hazard problems
نویسندگان
چکیده
منابع مشابه
A unifying approach to incentive compatibility in moral hazard problems
A new approach to moral hazard is presented. Once local incentive compatibility is satisfied, the problem of verifying global incentive compatibility is shown to be isomorphic to the problem of comparing two classes of distribution functions. Thus, tools from choice under uncertainty can be brought to bear on the problem. The approach allows classic justifications of the first-order approach (F...
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Two principals engage in Hotelling competition for an agent's services under incomplete information as to her outside option (location). This renders the agent's participation decision probabilistic from the perspective of each principal. Regardless of the market structure at equilibrium the optimal contract features a trade-off between participation probability and incentives. Rent and effort ...
متن کاملSupplement to “ A unifying approach to incentive compatibility in moral hazard problems
Recall that the random variables are said to be (positively) affiliated if the term inside the last parentheses is always nonnegative, while they are “negatively” affiliated if the term is always nonpositive. See Milgrom and Weber (1982) and Müller and Stoyan (2002). Thus, the sign determines whether variables are positively or negatively dependent. Technically, the numerical magnitude of the t...
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We address the single-source uncapacitated minimum cost network flow problem with general concave cost functions. Exact methods to solve this class of problems in their full generality are only able to address small to medium size instances, since this class of problems is known to be NP-Hard. Therefore, approximate methods are more suitable. In this work, we present a hybrid approach combining...
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ژورنال
عنوان ژورنال: Journal of Mathematical Economics
سال: 2001
ISSN: 0304-4068
DOI: 10.1016/s0304-4068(00)00055-0