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

Carlier, Guillaume; Zhang, Kelvin Shuangjian (2020), Existence of solutions to principal–agent problems with adverse selection under minimal assumptions, Journal of Mathematical Economics, 88, p. 64 - 71. 10.1016/j.jmateco.2020.03.002

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Type
Article accepté pour publication ou publié
Date
2020
Journal name
Journal of Mathematical Economics
Volume
88
Publisher
Elsevier
Pages
64 - 71
Publication identifier
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Author(s)
Carlier, Guillaume
CEntre de REcherches en MAthématiques de la DEcision [CEREMADE]
Zhang, Kelvin Shuangjian
Département de Mathématiques et Applications - ENS Paris [DMA]
Abstract (EN)
We prove an existence result for the principal-agent problem with adverse selection under general assumptions on preferences and allo-cation spaces. Instead of assuming that the allocation space is finite-dimensional or compact, we consider a more general coercivity condi-tion which takes into account the principal’s cost and the agents’ pref-erences. 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.
Subjects / Keywords
Principal-agent problems with adverse selection; Coercivity; Partial participation; Budget constraint.