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Existence and continuity of the optimal contract in adverse selection models with constraints

Author

Listed:
  • Aggey Semenov

    (Department of Economics, University of Ottawa, Ottawa, ON)

Abstract

We consider a general adverse selection model as an optimal control problem with mixed constraints. We prove that under broad conditions the optimal contract exists and is continuous.

Suggested Citation

  • Aggey Semenov, 2014. "Existence and continuity of the optimal contract in adverse selection models with constraints," Working Papers E1402E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:e1402e
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    File URL: http://sciencessociales.uottawa.ca/economics/sites/socialsciences.uottawa.ca.economics/files/1402e.pdf
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    References listed on IDEAS

    as
    1. David Martimort & Aggey Semenov & Lars Stole, 2017. "A Theory of Contracts with Limited Enforcement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(2), pages 816-852.
    2. Martimort, David & Semenov, Aggey, 2008. "Ideological uncertainty and lobbying competition," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 456-481, April.
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    More about this item

    Keywords

    Mixed constraints; optimal control; adverse selection;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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