A principle-agent problem with heterogeneous demand distributions for a carbon capture and storage system
MetadataShow full item record
Mechanism design problems optimize contract offerings from a principal to different types of agents who have private information about their demands for a product or a service. We study the implications of uncertainty in agents’ demands on the principal’s contracts. Speciﬁcally, we consider the setting where agents’ demands follow heterogeneous distributions and the principal offers a menu of contracts stipulating quantities and transfer payments for each demand distribution. We present analytical solutions for the special case when there are two distributions each taking two discrete values, as well as a method for deriving analytical solutions from numerical solutions. We describe one application of the model in carbon capture and storage systems to demonstrate various types of optimal solutions and to obtain managerial insights.
The article of record as published may be found at http://dx.doi.org/10.1016/j.ejor.2017.06.009Article in Press
RightsThis publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.
Showing items related by title, author, creator and subject.
Perez Duenas, Federico S. (Monterey, California. Naval Postgraduate School, 2011-06);The successful conclusion to the war in Afghanistan necessitates an array of solutions that includes non-kinetic actions. In particular, there is growing interest in having the local population take control of the regional ...
Cai, W.; Singham, D.I. (2016-10);Mechanism design problems optimize contract offerings from a principal to different types of agents who have private information about their demands for a product or a service. We study the implications of uncertainty in ...
Dumlupinar, Nihat (Monterey, California. Naval Postgraduate School, 2010-03);This thesis examines problems that states face when using private military companies (PMCs) and possible solutions for solving those problems. The main argument of this thesis is that the problems and their solutions are ...