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Three Principles of Competitive Nonlinear Pricing

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  • Page, F.H.Jr.
  • Monteiro, P.K.

Abstract

We make three contributions to the theory of contracting under asymmetric information. First, we establish a competitive revelation principle for contracting games in which several principals compete for one privately informed agent. In particular, we show that given any profile of incentive compatible indirect contracting mechanisms, there exists an incentive compatible direct contracting mechanism which in all circumstances generates the same contract selection as the profile of indirect mechanisms. Second, we establish a competitive taxation principle.

Suggested Citation

  • Page, F.H.Jr. & Monteiro, P.K., 2001. "Three Principles of Competitive Nonlinear Pricing," The Warwick Economics Research Paper Series (TWERPS) 592, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:592
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    References listed on IDEAS

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    1. Page, Frank H, Jr, 1992. "Mechanism Design for General Screening Problems with Moral Hazard," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(2), pages 265-281, April.
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    4. Guesnerie,Roger, 1998. "A Contribution to the Pure Theory of Taxation," Cambridge Books, Cambridge University Press, number 9780521629560.
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    6. 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.
    7. PAGE, Frank, 2000. "Competitive selling mechanisms: the delegation principle and farsighted stability," LIDAM Discussion Papers CORE 2000021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Philip J. Reny, 1999. "On the Existence of Pure and Mixed Strategy Nash Equilibria in Discontinuous Games," Econometrica, Econometric Society, vol. 67(5), pages 1029-1056, September.
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    More about this item

    Keywords

    INFORMATION ; GAMES ; TAXATION;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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