Participation constraints in discontinuous adverse selection models

David Martimort and Lars Stole

Post-Print from HAL

Abstract: We present a set of necessary and sufficient conditions for a class of optimal control problems with pure state constraints for which the objective function is linear in the state variable but the objective function is only required to be upper semicontinuous in the control variable. We apply those conditions to economic environments in contract theory where discontinuities in objectives prevail. Examples of applications include nonlinear pricing of digital goods and nonlinear pricing under competitive threat.

Keywords: Optimal control; Nonsmooth optimization; Convex analysis; Type-dependent participation constraints; Principal-agent models (search for similar items in EconPapers)
Date: 2022-07
References: Add references at CitEc
Citations:

Published in Theoretical Economics, 2022, 17 (3), pp.1145-1181. ⟨10.3982/TE3030⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Participation constraints in discontinuous adverse selection models (2022)
Working Paper: Participation constraints in discontinuous adverse selection models (2022)
Working Paper: Participation Constraints in Discontinuous Adverse Selection Models (2020)
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:hal:journl:halshs-03758833

DOI: 10.3982/TE3030

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().