Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296382 
Year of Publication: 
2022
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 17 [Issue:] 3 [Year:] 2022 [Pages:] 1145-1181
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We present a set of necessary and sufficient conditions for a class of optimal control problems with pure state constraints for which the objective function is linear in the state variable but the objective function is only required to be upper semi-continuous in the control variable. We apply those conditions to economic environments in contract theory where discontinuities in objectives prevail. Examples of applications include nonlinear pricing of digital goods and nonlinear pricing under competitive threat.
Subjects: 
convex analysis
nonsmooth optimization
Optimal control
principal&#x2013
agent models
type-dependent participation constraints
JEL: 
D82
D86
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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