A dual characterization of incentive efficiency.

DOI10.1016/S0022-0531(03)00064-4MaRDI QIDQ1411030zbMATH OpenFDO

Authors Belén Jerez

Publication date 15 October 2003

Published in Journal of Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/S0022-0531(03)00064-4

zbMATH Keywords

Asymmetric informationDualityIncentive efficiencyLinear programming

Mathematics Subject Classification ID

Resource and cost allocation (including fair division, apportionment, etc.) (91B32)

Review text

The paper shows that in the context of two problems of resource allocation under informational asymmetries, generating adverse selection and moral hazard problems, the incentive efficient allocations, i.e. the set of Pareto optimal allocations within the set of resource feasible and incentive compatible allocations, can be determined as solutions to a linear programming problem. It then goes on to use the primal and dual problems and the associated complementary slackness conditions to obtain a precise and simple characterization of these allocations.

Recommendations

• Efficiency and incentive compatibility in differential information economies
• Incentive efficient price systems in large insurance economies with adverse selection
• Nonparametric adverse selection problems
• Equilibria and Pareto optimal of markets with adverse selection
• Ex ante efficiency implies incentive compatibility

Cites work

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Cited in

(13)

• On signalling and screening in markets with asymmetric information
• Efficiency of the rank-order incentive systems
• Verifiability and group formation in markets
• Price caps and efficiency in markets with adverse selection
• Epsilon-efficiency in a dynamic partnership with adverse selection and moral hazard
• Incentive problems with unidimensional hidden characteristics: a unified approach
• Competitive equilibrium with search frictions: a general equilibrium approach
• scientific article; zbMATH DE number 1091161 (Why is no real title available?)
• Futures market: contractual arrangement to restrain moral hazard in teams
• Detecting profitable deviations
• A dual approach to agency problems
• Ex ante efficiency implies incentive compatibility
• Computing solutions to moral-hazard programs using the Dantzig-Wolfe decomposition algorithm

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