eprintid: 48243
rev_number: 8
eprint_status: archive
userid: 1482
importid: 105
dir: disk0/00/04/82/43
datestamp: 2023-10-02 06:54:33
lastmod: 2023-10-02 06:55:04
status_changed: 2023-10-02 06:54:33
type: article
metadata_visibility: show
creators_name: Garrett, Daniel  F.
creators_name: Georgiadis, George
creators_name: Smolin, Alexey
creators_name: Szentes, Balazs
creators_idrefppn: 241586712
creators_idrefppn: 261889648
creators_affiliation: Toulouse School of Economics;University of Toulouse Capitole
creators_halaffid: 81148
creators_halaffid: 1002422;81148
title: Optimal technology design
ispublished: pub
subjects: subjects_ECO
abstract: This paper considers a moral hazard model with agent limited liability. Prior to interacting with the principal, the agent designs the production technology, which is a specification of his cost of generating each output distribution. After observing the production technology, the principal offers a payment scheme and then the agent chooses a distribution over outputs. We show that there is an optimal design involving only binary distributions (i.e., the cost of any other distribution is prohibitively high), and we characterize the equilibrium technology defined on the binary distributions. Notably, the equilibrium payoff of both players is 1/e.
date: 2023-04
date_type: published
publisher: Elsevier
id_number: 10.1016/j.jet.2023.105621
official_url: http://tse-fr.eu/pub/128490
faculty: tse
divisions: tse
language: en
has_fulltext: FALSE
doi: 10.1016/j.jet.2023.105621
view_date_year: 2023
full_text_status: none
publication: Journal of Economic Theory
volume: vol.209
place_of_pub: Amsterdam
refereed: TRUE
issn: 0022-0531
oai_identifier: oai:tse-fr.eu:128490
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oai_lastmod: 2023-09-19T09:07:30Z
oai_set: tse
site: ut1
hal_id: hal-04224372
hal_passwd: &tdr59
hal_version: 1
hal_url: https://hal.science/hal-04224372
citation:   Garrett, Daniel F. <https://www.idref.fr/241586712>, Georgiadis, George, Smolin, Alexey <https://www.idref.fr/261889648> and Szentes, Balazs  (2023) Optimal technology design.    Journal of Economic Theory, vol.209.