Mechanism design models typically conclude by characterizing an optimal allocation schedule based on the principal's beliefs regarding agent value functions and the distribution of agent types. This article addresses the question of how a principal can develop these beliefs given a standard cross-sectional data set in which agents' input-output choices are observable, but their underlying heterogeneity is not. I employ the methodology to evaluate strategies for reducing the cost of a voluntary program that reduces cultivation on environmentally-sensitive farmland.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number
21420.
Length: Date of creation: 2006 Date of revision: Handle: RePEc:ags:aaea06:21420
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