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Article Dans Une Revue Theoretical Economics Année : 2022

Participation constraints in discontinuous adverse selection models

Résumé

We present a set of necessary and sufficient conditions for a class of optimal control problems with pure state constraints for which the objective function is linear in the state variable but the objective function is only required to be upper semicontinuous in the control variable. We apply those conditions to economic environments in contract theory where discontinuities in objectives prevail. Examples of applications include nonlinear pricing of digital goods and nonlinear pricing under competitive threat.

Dates et versions

halshs-03758833 , version 1 (23-08-2022)

Identifiants

  • HAL Id : halshs-03758833 , version 1
  • DOI : 10.3982/TE3030
  • WOS : 000831019400010

Citer

David Martimort, Lars A. Stole. Participation constraints in discontinuous adverse selection models. Theoretical Economics, 2022, 17 (3), pp.1145-1181. ⟨10.3982/TE3030⟩. ⟨halshs-03758833⟩
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