Ironing without control
Name
jet_final.pdf
Size
386.67 KB
Format
Adobe PDF
Checksum (MD5)
c465745fcd08cc1e566f2653304cf19a
Author(s)
Toikka, Juuso T.
Date Issued
November 2011
Journal
Journal of Economic Theory
Publisher
Elsevier
Citation
Toikka, Juuso. “Ironing Without Control.” Journal of Economic Theory 146, no. 6 (November 2011): 2510–2526.
Version
Author's final manuscript
Abstract
I extend Myersonʼs [R. Myerson, Optimal auction design, Math. Oper. Res. 6 (1981) 58–73] ironing technique to more general objective functions. The approach is based on a generalized notion of virtual surplus which can be maximized pointwise even when the monotonicity constraint implied by incentive compatibility binds. It is applicable to quasilinear principal-agent models where the standard virtual surplus is weakly concave in the allocation or appropriately separable in the allocation and type. No assumptions on allocation rules are required beyond monotonicity.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1016/j.jet.2011.06.003
