On the Existence of Optimal Contract Mechanisms for Incomplete Information Principal-Agent Models

Two abstract results are given for the existence of optimal contract selection mechanisms in principal-agent models; by a suitable reformulation of the (almost) incentive compatibility constraint, they deal with both single- and multi-agent models. In particular, it is shown that the existence resul...

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Bibliographic Details
Published in:Journal of economic theory 1996-01, Vol.68 (1), p.133-148
Main Author: Balder, Erik J.
Format: Article
Language:English
Subjects:
Contract method
Contracts
Economic models
Economic theory
Game theory
Utility functions
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Summary:Two abstract results are given for the existence of optimal contract selection mechanisms in principal-agent models; by a suitable reformulation of the (almost) incentive compatibility constraint, they deal with both single- and multi-agent models. In particular, it is shown that the existence results in a series of papers by F. H. Page follow from these two results. KWDJournal of Economic LiteratureClassification Numbers : C72, D82.
ISSN:0022-0531
1095-7235
DOI:10.1006/jeth.1996.0007