Three Principles of Competitive Nonlinear Pricing
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.
|Date of creation:||2001|
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- 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.
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