We consider the portfolio delegation problem in a world with complete contingent claim markets. A principal hires an agent to manage a portfolio. When the agent has limited liability (that is, there is a lower bound on the compensation contract), she may have an incentive to take on excessive...

This paper studies the problem of implementation of allocation rules in economic environments when agents are incompletely informed about the environment. The concept of equilibrium used is that of Bayesian Nash equilibrium. The authors show that a condition called Bayesian monotonicity is...