Optimal delegation in a multidimensional world
We study a model of delegation in which a principal takes a multidimensional action and an agent has private information about a multidimensional state of the world. The principal can design any direct mechanism, including stochastic ones. We provide necessary and sufficient conditions for an arbitrary mechanism to maximize the principal’s expected payoff. A key step of our analysis shows that a mechanism is incentive compatible if and only if its induced indirect utility is convex and lies below the agent’s first-best payoff.
Date: 7 June 2024, 14:15 (Friday, 7th week, Trinity 2024)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room G or https://zoom.us/j/93867615769?pwd=T1NsTEVwNE40R3pEVW9yTlBicG1mdz09
Speaker: Andreas Kleiner (Bonn University)
Organising department: Department of Economics
Part of: Nuffield Economic Theory Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Edward Clark