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A note on interval delegation

Author

Listed:
  • Manuel Amador

    (University of Minnesota
    Federal Reserve Bank of Minneapolis)

  • Kyle Bagwell

    (Stanford University)

  • Alex Frankel

    (University of Chicago)

Abstract

In this note we extend the Amador and Bagwell (Econometrica 81:1541–1599, 2013) conditions for confirming the optimality of a proposed interval delegation set to the possibility of degenerate intervals, in which the agent takes the same action at every state. We consider the cases of money burning as well as no money burning. These results allow us to provide new sufficient conditions on utility functions and state distributions to guarantee that some interval—degenerate or non-degenerate—will be optimal.

Suggested Citation

  • Manuel Amador & Kyle Bagwell & Alex Frankel, 2018. "A note on interval delegation," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(2), pages 239-249, October.
    • Handle: RePEc:spr:etbull:v:6:y:2018:i:2:d:10.1007_s40505-017-0133-4
    DOI: 10.1007/s40505-017-0133-4
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    References listed on IDEAS

    as
    1. Goltsman, Maria & Hörner, Johannes & Pavlov, Gregory & Squintani, Francesco, 2009. "Mediation, arbitration and negotiation," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1397-1420, July.
    2. Martimort, David & Semenov, Aggey, 2006. "Continuity in mechanism design without transfers," Economics Letters, Elsevier, vol. 93(2), pages 182-189, November.
    3. Ambrus, Attila & Egorov, Georgy, 2017. "Delegation and nonmonetary incentives," Journal of Economic Theory, Elsevier, vol. 171(C), pages 101-135.
    4. Kovác, Eugen & Mylovanov, Tymofiy, 2009. "Stochastic mechanisms in settings without monetary transfers: The regular case," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1373-1395, July.
    5. Manuel Amador & Kyle Bagwell, 2013. "The Theory of Optimal Delegation With an Application to Tariff Caps," Econometrica, Econometric Society, vol. 81(4), pages 1541-1599, July.
    6. Nahum D. Melumad & Toshiyuki Shibano, 1991. "Communication in Settings with No. Transfers," RAND Journal of Economics, The RAND Corporation, vol. 22(2), pages 173-198, Summer.
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    Citations

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    Cited by:

    1. Gan, Tan & Hu, Ju & Weng, Xi, 2023. "Optimal contingent delegation," Journal of Economic Theory, Elsevier, vol. 208(C).
    2. Amador, Manuel & Bagwell, Kyle, 2020. "Money burning in the theory of delegation," Games and Economic Behavior, Elsevier, vol. 121(C), pages 382-412.
    3. Nicole Immorlica & Nicholas Wu & Brendan Lucier, 2024. "Maximal Procurement under a Budget," Papers 2404.15531, arXiv.org.

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    More about this item

    Keywords

    Delegation; Optimal contracting; Tariff caps;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F10 - International Economics - - Trade - - - General

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