Adverse selection without single crossing: Monotone solutions (vol 158, pg 127, 2015)

• 成果类型: Correction
• 署名作者: Araujo, A.; Vieira, S.; Parra, C.
• 署名单位: Instituto Nacional de Matematica Pura e Aplicada (IMPA); Getulio Vargas Foundation; Universidade do Estado do Rio de Janeiro
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2022.105525
• 发表日期: 2022
• 关键词: Spence-Mirrlees condition; single-crossing condition; Global incentive compatibility; Bunching

摘要

In Schottmuller (2015), C. Schottmuller proposes a method for solving the principal's maximization problem. Using this method, he solves three examples. We show that the solutions presented in that paper are suboptimal. For each of the examples, we show how to build an optimal decision function that yields a larger expected payoff for the principal. These decision functions are monotonic but not strictly monotonic. Therefore, they open up the possibility of bunching. In addition, we identify that the source of the problem is (Schottmuller, 2015, Theorem 1, sixth bullet point) that is not correct. The sufficiency conditions for strict monotonicity of the decision function q that are presented in Schottmuller (2015, Proposition 3 and Proposition 4) are also incorrect. (C) 2022 Elsevier Inc. All rights reserved.