The Implementation Duality

56 Pages Posted: 18 Mar 2015

See all articles by Georg Nöldeke

Georg Nöldeke

University of Basel; University of Basel

Larry Samuelson

Yale University - Department of Economics; Yale University - Cowles Foundation

Multiple version iconThere are 3 versions of this paper

Date Written: March 16, 2015

Abstract

We use the theory of abstract convexity to study adverse-selection principal-agent problems and two-sided matching problems, departing from much of the literature by not requiring quasilinear utility. We formulate and characterize a basic underlying implementation duality. We show how this duality can be used to obtain a sharpening of the taxation principle, to obtain a general existence result for solutions to the principal-agent problem, to show that (just as in the quasilinear case) all increasing decision functions are implementable under a single crossing condition, and to obtain an existence result for stable outcomes featuring positive assortative matching in a matching model.

Keywords: Implementation, Duality, Galois connection, Imperfectly transferable utility, Principal-agent model, Two-sided matching

JEL Classification: C62, C78, D82, D86

Suggested Citation

Nöldeke, Georg and Samuelson, Larry, The Implementation Duality (March 16, 2015). Cowles Foundation Discussion Paper No. 1993, Available at SSRN: https://ssrn.com/abstract=2579057 or http://dx.doi.org/10.2139/ssrn.2579057

Georg Nöldeke

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

HOME PAGE: http://sites.google.com/site/georgnoldeke/

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

HOME PAGE: http://sites.google.com/site/georgnoldeke/

Larry Samuelson (Contact Author)

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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