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  3. American Economic Review
  4. January 2014
  5. Aligned Delegation

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Aligned Delegation

  • Alexander Frankel
American Economic Review
vol. 104, no. 1, January 2014
(pp. 66–83)
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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.

Citation

Frankel, Alexander. 2014. "Aligned Delegation." American Economic Review, 104 (1): 66–83. DOI: 10.1257/aer.104.1.66

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