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  -