Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

Certainty Equivalence and Noisy Redistribution

Abstract : This paper assesses the usefulness of stochastic contracts in the presence of informational asymmetries. It identifies circumstances where a stochastic redistribution policy is socially dominated by the deterministic policy where after-tax income lotteries are replaced with their certainty equivalent. It also provides a parametric example where every stochastic menu which has the optimal deterministic menu as certainty equivalent is dominated by the deterministic menu, while there exist feasible and incentive compatible lotteries improving locally upon the deterministic menu.
Document type :
Preprints, Working Papers, ...
Complete list of metadata

https://halshs.archives-ouvertes.fr/halshs-03359574
Contributor : Caroline Bauer Connect in order to contact the contributor
Submitted on : Thursday, September 30, 2021 - 12:04:25 PM
Last modification on : Friday, October 15, 2021 - 1:41:45 PM

File

wp_202151_.pdf
Files produced by the author(s)

Identifiers

  • HAL Id : halshs-03359574, version 1

Collections

Citation

Stéphane Gauthier, Guy Laroque. Certainty Equivalence and Noisy Redistribution. 2021. ⟨halshs-03359574⟩

Share

Metrics

Record views

219

Files downloads

6