# Optimal bunching without optimal control

## Author Info

• Noldeke, Georg
• Samuelson, Larry

## Abstract

This paper presents simple suÂ±cient conditions under which optimal bunches in adverse-selection principal-agent problems can be characterized without using optimal control theory.

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## Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 134 (2007)
Issue (Month): 1 (May)
Pages: 405-420

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Handle: RePEc:eee:jetheo:v:134:y:2007:i:1:p:405-420

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Web page: http://www.elsevier.com/locate/inca/622869

## Related research

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Find related papers by JEL classification:
• C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
• C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
• D40 - Microeconomics - - Market Structure and Pricing - - - General
• D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

## References

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1. Lewis, Tracy R & Sappington, David E M, 1989. "Inflexible Rules in Incentive Problems," American Economic Review, American Economic Association, vol. 79(1), pages 69-84, March.
2. Bruno Biais & David Martimort & Jean-Charles Rochet, 2000. "Competing Mechanisms in a Common Value Environment," Econometrica, Econometric Society, vol. 68(4), pages 799-838, July.
3. Rochet, J. C., 1985. "The taxation principle and multi-time Hamilton-Jacobi equations," Journal of Mathematical Economics, Elsevier, vol. 14(2), pages 113-128, April.
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5. Lewis, Tracy R. & Sappington, David E. M., 1989. "Countervailing incentives in agency problems," Journal of Economic Theory, Elsevier, vol. 49(2), pages 294-313, December.
6. Eric Maskin & John Riley, 1984. "Monopoly with Incomplete Information," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 171-196, Summer.
7. Goldman, M Barry & Leland, Hayne E & Sibley, David S, 1984. "Optimal Nonuniform Prices," Review of Economic Studies, Wiley Blackwell, vol. 51(2), pages 305-19, April.
8. Jullien, Bruno, 2000. "Participation Constraints in Adverse Selection Models," Journal of Economic Theory, Elsevier, vol. 93(1), pages 1-47, July.
9. Rochet, Jean-Charles, 1987. "A necessary and sufficient condition for rationalizability in a quasi-linear context," Journal of Mathematical Economics, Elsevier, vol. 16(2), pages 191-200, April.
10. Robert C. Feenstra & Tracy R. Lewis, 1987. "Negotiated Trade Restrictions with Private Political Pressure," NBER Working Papers 2374, National Bureau of Economic Research, Inc.
11. Glosten, Lawrence R, 1994. " Is the Electronic Open Limit Order Book Inevitable?," Journal of Finance, American Finance Association, vol. 49(4), pages 1127-61, September.
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13. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, January.
14. Wilson, Robert, 1997. "Nonlinear Pricing," OUP Catalogue, Oxford University Press, number 9780195115826.
15. Glosten, Lawrence R, 1989. "Insider Trading, Liquidity, and the Role of the Monopolist Specialist," The Journal of Business, University of Chicago Press, vol. 62(2), pages 211-35, April.
16. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
17. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, January.
18. Guesnerie, Roger & Laffont, Jean-Jacques, 1984. "A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm," Journal of Public Economics, Elsevier, vol. 25(3), pages 329-369, December.
19. Maggi G. & Rodriguez-Clare A., 1995. "On Countervailing Incentives," Journal of Economic Theory, Elsevier, vol. 66(1), pages 238-263, June.
20. Paul Milgrom & Ilya Segal, 2002. "Envelope Theorems for Arbitrary Choice Sets," Econometrica, Econometric Society, vol. 70(2), pages 583-601, March.
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## Citations

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Cited by:
1. Hector Chade & Edward Schlee, 2008. "Optimal Insurance with Adverse Selection," Levine's Working Paper Archive 122247000000002175, David K. Levine.
2. David Martimort & Aggey Semenov & Lars Stole, 2013. "A Theory of Contracts with Limited Enforcement," Working Papers E1304E, University of Ottawa, Department of Economics.
3. Mailath, George J. & Nöldeke, Georg, 2008. "Does competitive pricing cause market breakdown under extreme adverse selection?," Journal of Economic Theory, Elsevier, vol. 140(1), pages 97-125, May.
4. Christian Ewerhart, 2013. "Regular type distributions in mechanism design and $$\rho$$ -concavity," Economic Theory, Springer, vol. 53(3), pages 591-603, August.
5. Ruiz del Portal, X., 2009. "A general principal-agent setting with non-differentiable mechanisms: Some examples," Mathematical Social Sciences, Elsevier, vol. 57(2), pages 262-278, March.
6. Toikka, Juuso, 2011. "Ironing without control," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2510-2526.

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