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Optimal Delegation in a Multidimensional World

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  • Andreas Kleiner

Abstract

We study a model of delegation in which a principal takes a multidimensional action and an agent has private information about a multidimensional state of the world. The principal can design any direct mechanism, including stochastic ones. We provide necessary and sufficient conditions for an arbitrary mechanism to maximize the principal's expected payoff. We also discuss simple conditions which ensure that some convex delegation set is optimal. A key step of our analysis shows that a mechanism is incentive compatible if and only if its induced indirect utility is convex and lies below the agent's first-best payoff.

Suggested Citation

  • Andreas Kleiner, 2022. "Optimal Delegation in a Multidimensional World," Papers 2208.11835, arXiv.org.
    • Handle: RePEc:arx:papers:2208.11835
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    References listed on IDEAS

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    1. Anton Kolotilin & Andriy Zapechelnyuk, 2025. "Persuasion Meets Delegation," Econometrica, Econometric Society, vol. 93(1), pages 195-228, January.
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    5. Navin Kartik & Andreas Kleiner & Richard Van Weelden, 2021. "Delegation in Veto Bargaining," American Economic Review, American Economic Association, vol. 111(12), pages 4046-4087, December.
    6. Elliot Lipnowski & Doron Ravid, 2020. "Cheap Talk With Transparent Motives," Econometrica, Econometric Society, vol. 88(4), pages 1631-1660, July.
    7. Andreas Kleiner & Benny Moldovanu & Philipp Strack, 2021. "Extreme Points and Majorization: Economic Applications," Econometrica, Econometric Society, vol. 89(4), pages 1557-1593, July.
    8. Koessler, Frédéric & Martimort, David, 2012. "Optimal delegation with multi-dimensional decisions," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1850-1881.
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    Cited by:

    1. Navin Kartik & SangMok Lee & Daniel Rappoport, 2024. "Single-Crossing Differences in Convex Environments," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(5), pages 2981-3012.

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