This paper develops a technique for studying incentive problems with unidimensional hidden characteristics in a way that is independent of whether the type set is finite, the type distribution has a continuous density, or the type distribution has both mass points and an atomless part. By this technique, the proposition that optimal incentive schemes induce no distortion “at the top” and downward distortions “below the top” is extended to arbitrary type distributions. However, mass points in the interior of the type set require pooling with adjacent higher types and, unless there are other complications, a discontinuous jump in the transition from adjacent lower types.
MLA
Hellwig, Martin F.. “Incentive Problems With Unidimensional Hidden Characteristics: A Unified Approach.” Econometrica, vol. 78, .no 4, Econometric Society, 2010, pp. 1201-1237, https://doi.org/10.3982/ECTA7726
Chicago
Hellwig, Martin F.. “Incentive Problems With Unidimensional Hidden Characteristics: A Unified Approach.” Econometrica, 78, .no 4, (Econometric Society: 2010), 1201-1237. https://doi.org/10.3982/ECTA7726
APA
Hellwig, M. F. (2010). Incentive Problems With Unidimensional Hidden Characteristics: A Unified Approach. Econometrica, 78(4), 1201-1237. https://doi.org/10.3982/ECTA7726
We are deeply saddened by the passing of Kate Ho, the John L. Weinberg Professor of Economics and Business Policy at Princeton University and a Fellow of the Econometric Society. Kate was a brilliant IO economist and scholar whose impact on the profession will resonate for many years to come.
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