Robust contracting in general contract spaces

Julio Backhoff-Veraguas, Patrick Beissner*, Ulrich Horst

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    1 Citation (Scopus)

    Abstract

    We consider a general framework of optimal mechanism design under adverse selection and ambiguity about the type distribution of agents. We prove the existence of optimal mechanisms under minimal assumptions on the contract space and prove that centralized contracting implemented via mechanisms is equivalent to delegated contracting implemented via a contract menu under these assumptions. Our abstract existence results are applied to a series of applications that include models of optimal risk sharing and of optimal portfolio delegation.

    Original languageEnglish
    Pages (from-to)917-945
    Number of pages29
    JournalEconomic Theory
    Volume73
    Issue number4
    DOIs
    Publication statusPublished - Jun 2022

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