Optimal mechanisms with non-quasilinear preferences

Speaker：James Bergin, Professor, Maynooth University

Host：Yang Erya, Assistant Professor, Lingnan College

Time and Date：14:30, March 13, 2026 (Friday)

Venue：J.T.WU Conference Room (204), Lingnan Hall

Language：English

Abstract：

This paper considers the classic mechanism design problem—maximizing an objective subject to a system of incentive compatibility constraints. This problem has been studied extensively in the case of quasilinear preferences, but the general case has received little attention in the mechanism design literature. This paper studies the general case, considering separately the incentive structure and implied incentive compatible linkages, then evaluating incentive compatible variations relative to an arbitrary objective function. This provides a new method and perspective to the optimization problem. When bunching occurs, it's not possible to implement the 'ironing' technique, but the method here carries over directly to this case. One special case of this model is examined in detail—where there is risk aversion in preferences and the objective. Finally, for the general case, a simple numerical optimization routine is given to determine an approximate solution.

Profile:

James Bergin received his B.A. from the National University of Ireland, his MSc from the London School of Economics and Political Science, and his Ph.D. from the Princeton University. His research interests include microeconomic theory, intellectual property, industrial organization, mechanism design and public economics.