A dynamic optimization approach to delegation with an application to volunteer contracts

• 成果类型: Article
• 署名作者: Saran, Rene
• 署名单位: University of Cincinnati; University System of Ohio; University of Cincinnati
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2025.10.002
• 发表日期: 2026
• 关键词: impure altruism; monopolist; Donations; settings

摘要

We present a novel and tractable method that is widely applicable to general delegation problems. Every delegation set is equivalent to an incentive feasible mechanism. We characterize mechanisms with at most finitely many points of discontinuity and prove that the corresponding constrained problem is equivalent to a discrete-time, finite-horizon, dynamic optimization problem. This transformation makes the problem tractable: The dynamic problem is essentially a shortest-path problem that is amenable to different solution methods. By analyzing the dynamic problem, we show that restricting to mechanisms with at most finitely many points of discontinuity broadly entails no loss to the principal and identify a novel sufficient condition for such mechanisms to be optimal. We also provide a numerical method to find an approximately optimal mechanism. Lastly, we illustrate the results in a new delegation model of volunteer contracts.