 Dominant Strategy Mechanisms for Contract Auctions with Risk Aversion and Moral HazardInternational Journal of Game Theory, 1994, vol. 23, issue 1, 25-42 Abstract: Within the class dominant strategy incentive compatible mechanisms, we show that there exists an optimal contracting mechanism for the principal for a version of the incomplete information principal-agent problem in which several agents compete for a contract and the principal selects an agent via a contract auction. In our auction model, we assume that the principal and the agents are risk averse, and we allow for uncountably many agent types. We also assume that the principal's probability measure over type profiles in such that correlation between agent's types is possible. Thus, we do not require that agents' types be independently distributed. Finally, we impose limited liability constraints upon the set of contracts. Due to the nature of the individual rationality and incentive compatibility constraints, the existence problem is nonstandard and novel existence arguments are required. We prove existence using a measurable selection result and a new notion of compactness called K-compactness. Date: 1994 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:jogath:v:23:y:1994:i:1:p:25-42 Ordering information: This journal article can be ordered from Access Statistics for this article International Journal of Game Theory is currently edited by Shmuel Zamir, Vijay Krishna and Bernhard von Stengel More articles in International Journal of Game Theory from Springer, Game Theory Society |
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