Skip to main content

All solution graphs in multidimensional screening

Babu Nahata, PhD S. Kokovin E. Zhelobodko
Journal of New Economic Association. January 1, 2010

View Publication

Abstract

We study general discrete-types multidimensional screening without any noticeable restrictions on valuations, using instead epsilon-relaxation of the incentive-compatibility constraints. Any active (becoming equality) constraint can be perceived as “envy” arc from one type to another, so the set of active constraints is a digraph. We find that: (1) any solution has an in-rooted acyclic graph (“river”); (2) for any logically feasible river there exists a screening problem resulting in such river. Using these results, any solution is characterized both through its spanning-tree and through its Lagrange multipliers, that can help in finding solutions and their efficiency/distortion properties.

Chinese (Simplified)EnglishGermanHindiRussian