Multidimensional Screening, Affiliation, and Full Separation
We solve a class of two-dimensional screening problems in which one dimension has the standard features, while the other dimension is impossible to exaggerate and enters the agent's utility only through the message but not the true type. Natural applications are procurement and regulation where the producer's ability to produce quality and his costs of producing quantity are both unknown ; or selling to a budget constrained buyer. We show that under these assumptions, the orthogonal incentive constraints are necessary and suffcient for the full set of incentive constraints. Provided that types are affliated and all the conditional distributions of types have monotonic inverse hazard rates, the solution is fully separating in both dimensions.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0) 2476 523202
Fax: +44 (0) 2476 523032
Web page: http://www2.warwick.ac.uk/fac/soc/economics/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:wrk:warwec:802. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helen Neal)
If references are entirely missing, you can add them using this form.