Monotone Allocations without Single-Crossing: When to Bunch and When to Jump

Aloisio Araujo, Carolina Parra and Sergei Vieira

Papers from arXiv.org

Abstract: A principal screens an agent whose technology has a minimum efficient scale, so the Spence-Mirrlees condition fails along a monotone dividing curve: the locus at which every type values marginal output equally. For the class in which this curve and the relaxed solution are both strictly monotone, the optimal contract obeys a trichotomy, governed by how the two meet: a jump is impossible when they never meet, unavoidable across a flat dividing curve, a choice across a strictly increasing one. The optimum is found, not conjectured: each solution is certified as globally optimal among all implementable allocations, deterministic or random, by dualizing the family of binding constraints through an explicit weight; the certificates require neither linear primitives nor any restriction on the shape of the contract. Under mild regularity the class comprises exactly forty configurations; each is mapped to its forced shape, solved in closed form, and certified.

Date: 2026-08
References: Add references at CitEc
Citations:

Downloads: (external link)
https://arxiv.org/pdf/2608.19474 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2608.19474

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().