A principal provides budgets to agents (e.g., divisions of a firm or the principal’s children) whose expenditures provide her benefits, either materially or because of altruism. Only agents know their potential to generate benefits. We prove that if the more “productive” agents are also...

We consider the mechanism design problem when agents' types are multidimensional and continuous, and their valuations are interdependent. If there are at least three agents whose types satisfy a weak correlation condition, then for any decision rule there exist balanced transfers that render...

How should an organization's center allocate resources to units under its control which are better informed? Even with conscientious productivity reviews, important information will remain asymmetrically held. If units value their own expenditures more than those of their peers, they will seek...