Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/176125 
Year of Publication: 
2015
Series/Report no.: 
Texto para discussão No. 642
Publisher: 
Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia, Rio de Janeiro
Abstract: 
This note considers the problem of a principal (she) who faces a privately informed agent (he) and only knows one moment of the distribution from which his types are drawn. Payoffs are non-linear in the allocation and the principal maximizes her worst-case expected profits. We recast the robust design problem as a zero-sum game played by the principal and an adversarial nature who seeks to minimize her expected payoffs. The robust mechanism and the worst case distribution are, then, the Nash equilibrium of such game. A robustness property of the optimal mechanism imposes restrictions on the principal’s ex-post profit function. These restrictions then lead to the optimal mechanism. The robust mechanism entails exclusion of low types and distortions at the intensive margin that (in a precise sense) are larger than what those that prevail in standard Bayesian mechanism design problems.
Subjects: 
Robust Mechanism Design
Monopolistic Screening under Uncertainty
Taxation and Regulation under Uncertainty
Dynamic and Multidimensional Robust Design
JEL: 
D82
D86
Document Type: 
Working Paper

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