Stochastic Mechanisms and Quasi-Linear Preferences

Abstract: Many optimal contracting papers use quasi-linear preferences. To exclude stochastic mechanisms they impose a (sufficient) condition on how the curvature of an agent's objective function varies with type. We show with quasi-linear preferences that an optimal deterministic outcome without bunching implies that stochastic mechanisms are not optimal (without any additional assumptions).

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Year of publication:	2012
Authors:	boone, jan ; Schottmuller, C.
Institutions:	Tilburg University, Center for Economic Research
Subject:	stochastic mechanisms \| contract theory \| quasi-linear preferences

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Extent:	application/pdf
Series:	Discussion Paper.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series CentER Discussion Paper Number 2012-047
Classification:	D82 - Asymmetric and Private Information ; H21 - Efficiency; Optimal Taxation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011092726