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Participation constraints in discontinuous adverse selection models

Martimort, David; Stole, Lars A. - In: Theoretical economics : TE ; an open access journal in … 17 (2022) 3, pp. 1145-1181

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...

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