Convexity and multi-dimensional screening for spaces with different dimensions

DOI10.1016/J.JET.2012.05.004zbMATH Open1283.91110OpenAlexW2008238408MaRDI QIDQ694741FDOQ694741

Authors Brendan Pass 

Publication date 13 December 2012

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

Full work available at URL https://arxiv.org/abs/1108.3798

zbMATH Keywords

convexityoptimal transportationasymmetric informationmulti-dimensional screeningmonopolyprincipal-agent problemexclusionunequal dimensions

Mathematics Subject Classification ID

Economics of information (91B44)

Abstract: We study the principal-agent problem. We show that $b$-convexity of the space of products, a condition which appears in a recent paper by Figalli, Kim and McCann cite{fkm}, is necessary to formulate the problem as a maximization over a convex set. We then show that when the dimension $m$ of the space of types is larger than the dimension $n$ of the space of products, this condition implies that the extra dimensions do not encode independent economic information. When $m$ is smaller than $n$, we show that under $b$-convexity of the space of products, it is always optimal for the principal to offer goods only from a certain prescribed subset. We show that this is equivalent to offering an $m$-dimensional space of goods.

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Cited In (4)

• Multidimensional screening.
• Title not available (Why is no real title available?)
• When is multidimensional screening a convex program?
• Geometry of vectorial martingale optimal transportations and duality

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