Screening while controlling an externality

• 成果类型: Article
• 署名作者: Ostrizek, Franz; Sartori, Elia
• 署名单位: Institut d'Etudes Politiques Paris (Sciences Po); University of Naples Federico II
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2023.01.011
• 发表日期: 2023
• 页码: 26-55
• 关键词: Multidimensional screening; Externality; Ironing; Influence

摘要

We propose a tractable framework to introduce externalities in a screening model. Agents differ in both payoff-type and influence-type (ranking how beneficial their actions are for others). Applications range from pricing network goods to regulating industries that create externalities. Inefficiencies arise only if the payoff-type is unobservable. When both dimensions are unobserved, the optimal allocation satisfies lexicographic monotonicity: increasing along the payoff-type to satisfy incentive compatibility, but tilted towards influential agents to move the externality in the socially desirable direction. In particular, the allocation depends on a private characteristic that is payoff-irrelevant for the agent. We characterize the solution through a two-step ironing procedure that addresses the non-monotonicity in virtual values arising from the countervailing impact of payoff-and influence-type. Rents from influence can emerge but only indirectly, i.e. when the observed level of influence is used as a signal of the unobserved payoff-type.(c) 2023 Elsevier Inc. All rights reserved.