Please use this identifier to cite or link to this item:
Kwon, Suehuyn
Year of Publication: 
Series/Report no.: 
CESifo Working Paper 6621
This paper studies dynamic mechanism design in the presence of moral hazard. Revelation principle extends to models with moral hazard for both full commitment and limited commitment, but I also identify environments in which the principal doesn’t benefit from eliciting agents’ private information or beliefs. One-shot deviation principle requires the knowledge of agents’ private strategies after deviations, and I characterize the necessary and sufficient condition for all IC constraints that requires only the knowledge of agents’ equilibrium strategies. I also provide two sufficient conditions for smaller set of IC constraints that require obedience after a single-period deviation to be sufficient for all IC constraints. I illustrate how to apply revelation principle and the smaller set of IC constraints with an application allowing for endogenous state.
dynamic mechanism design
adverse selection
moral hazard
revelation principle
one-shot deviation principle
endogenous state
Document Type: 
Working Paper

Files in This Item:

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.