Who and How? Adverse Selection and Flexible Moral Hazard (by Henrique Castro-Pires, Deniz Kattwinkel, and Jan Knoepfle)
Henrique Castro-Pires, Harvard Business School
We characterize incentive compatible mechanisms in environments with hidden types and flexible hidden actions. Our approach introduces extended recommendation schedules that specify prescribed actions also off-path, after misreports. This approach yields a tractable and complete characterization of incentive compatibility, which includes a generalized integral monotonicity condition capturing the interaction between adverse selection and moral hazard. We demonstrate the usefulness of the characterization across a range of contracting problems.
| Building: | North Quad |
|---|---|
| Website: | |
| Event Type: | Workshop / Seminar |
| Tags: | Economics, seminar, Theory |
| Source: | Happening @ Michigan from Department of Economics, Economic Theory, Department of Economics Seminars |
