TY - RPRT AB - We make three contributions to the theory of contracting under asymmetric information. First, we establish a competitive analog to the revelation principle which we call the implementation principle. This principle provides a complete characterization of all incentive compatible, indirect contracting mechanisms in terms of contract catalogs (or menus), and allows us to conclude that in competitive contracting situations, …rms in choosing their contracting strategies can restrict attention, without loss of generality, to contract catalogs. Second, we establish a competitive taxation principle. This principle, a re…nement of the implementation principle, provides a complete characterization of all implementable nonlinear pricing schedules in terms of product-price catalogs and allows us to reduce any game played over nonlinear pricing schedules to a strategically equivalent game played over product-price catalogs. Third, applying the notion of payo¤ security (Reny (1999)) and the competitive taxation principle, we demonstrate the existence of a Nash equilibrium for the mixed extension of the nonlinear pricing game. Moreover, we identify a large class of competitive nonlinear pricing games whose mixed extensions satisfy payo¤ security. This paper extends earlier work by the first author (see Page (1992, 1999)). AU - Page, Frank H., Jr. AU - Monteiro, Paulo K. DA - 2002-06-06 DA - 2002 DO - 10.22004/ag.econ.269362 DO - doi ID - 269362 KW - Agricultural and Food Policy KW - Demand and Price Analysis KW - Financial Economics KW - competitive nonlinear pricing KW - delegation principle KW - implementation principle KW - competitive taxation principle KW - Nash equilibria for discontinuous games L1 - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf L1 - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf?subformat=pdfa L2 - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf L2 - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf?subformat=pdfa L4 - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf L4 - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf?subformat=pdfa LA - eng LA - English LK - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf LK - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf?subformat=pdfa N2 - We make three contributions to the theory of contracting under asymmetric information. First, we establish a competitive analog to the revelation principle which we call the implementation principle. This principle provides a complete characterization of all incentive compatible, indirect contracting mechanisms in terms of contract catalogs (or menus), and allows us to conclude that in competitive contracting situations, …rms in choosing their contracting strategies can restrict attention, without loss of generality, to contract catalogs. Second, we establish a competitive taxation principle. This principle, a re…nement of the implementation principle, provides a complete characterization of all implementable nonlinear pricing schedules in terms of product-price catalogs and allows us to reduce any game played over nonlinear pricing schedules to a strategically equivalent game played over product-price catalogs. Third, applying the notion of payo¤ security (Reny (1999)) and the competitive taxation principle, we demonstrate the existence of a Nash equilibrium for the mixed extension of the nonlinear pricing game. Moreover, we identify a large class of competitive nonlinear pricing games whose mixed extensions satisfy payo¤ security. This paper extends earlier work by the first author (see Page (1992, 1999)). PY - 2002-06-06 PY - 2002 T1 - Three Principles of Competitive Nonlinear Pricing TI - Three Principles of Competitive Nonlinear Pricing UR - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf UR - https://ageconsearch.umn.edu/record/269362/files/twerp592a.pdf?subformat=pdfa Y1 - 2002-06-06 ER -