Robust Contracting in General Contract Spaces

Julio Backhoff-Veraguas, Patrick Beissner and Ulrich Horst

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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.

Date: 2019-10, Revised 2021-03
New Economics Papers: this item is included in nep-cta, nep-des and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1910.12516

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