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American Economic Review: Vol. 104 No. 1 (January 2014)

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Aligned Delegation

Article Citation

Frankel, Alexander. 2014. "Aligned Delegation." American Economic Review, 104(1): 66-83.

DOI: 10.1257/aer.104.1.66

Abstract

A principal delegates multiple decisions to an agent, who has private information relevant to each decision. The principal is uncertain about the agent's preferences. I solve for max-min optimal mechanisms— those which maximize the principal's payoff against the worst case agent preference types. These mechanisms are characterized by a property I call "aligned delegation": all agent types play identically, as if they shared the principal's preferences. Max-min optimal mechanisms may take the simple forms of ranking mechanisms, budgets, or sequential quotas.

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Authors

Frankel, Alexander (U Chicago)

JEL Classifications

D44: Auctions
D83: Search; Learning; Information and Knowledge; Communication; Belief
J16: Economics of Gender; Non-labor Discrimination


American Economic Review


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