Existence of solutions to principal-agent problems with adverse selection under minimal assumptions

DOI10.1016/J.JMATECO.2020.03.002zbMATH Open1437.91264arXiv1902.06552OpenAlexW3012739994MaRDI QIDQ2178586FDOQ2178586

Kelvin Shuangjian Zhang, Guillaume Carlier

Publication date: 11 May 2020

Published in: Journal of Mathematical Economics (Search for Journal in Brave)

Abstract: We prove an existence result for the principal-agent problem with adverse selection under general assumptions on preferences and allocation spaces. Instead of assuming that the allocation space is finite-dimensional or compact, we consider a more general coercivity condition which takes into account the principal's cost and the agents' preferences. Our existence proof is simple and flexible enough to adapt to partial participation models as well as to the case of type-dependent budget constraints.

Full work available at URL: https://arxiv.org/abs/1902.06552

zbMATH Keywords

coercivitybudget constraintpartial participationprincipal-agent problems with adverse selection

Mathematics Subject Classification ID

Principal-agent models (91B43)

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Cited In (3)

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