Participation constraints in discontinuous adverse selection models

• 成果类型: Article
• 署名作者: Martimort, David; Stole, Lars A.
• 署名单位: Paris School of Economics; University of Chicago
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE3030
• 发表日期: 2022-07-01
• 页码: 1145-1181
• 关键词: Optimal control; nonsmooth optimization; convex analysis; type-dependent participation constraints; principal-agent models; D82; D86

摘要

We present a set of necessary and sufficient conditions for a class of optimal control problems with pure state constraints for which the objective function is linear in the state variable but the objective function is only required to be upper semicontinuous in the control variable. We apply those conditions to economic environments in contract theory where discontinuities in objectives prevail. Examples of applications include nonlinear pricing of digital goods and nonlinear pricing under competitive threat.