Nonparametric adverse selection problems (Q1854738)

Consider a principal-agent problem where the agent's type is represented by a function. Then solving the problem that results requires an appeal to function space methods. This involves replacing convexity by an abstract notion of \(X\)-convexity and subdifferentiability by \(X\)-subdifferentiability. Under suitable measurability conditions, one can prove the existence of a solution to the principal-agent problem. A characterization of such a solution is also provided.