extensive analysis than fits within this chapter. The reader interested in such models—in
particular, so-called models of countervailing incentives in which u(x
0
,·) is increasing in
type—should consult Lewis and Sappington (1989) and Maggi and Rodriguez-Clare
(1995), among other articles.
Assumption 5 reflects that the buyer is acquiring something more than what he
would have absent trade. It is a natural assumption in contractual screening settings
more generally (e.g., no trade could constitute zero hours worked when an uninformed
principal seeks to hire an informed agent).
6.2.1.3 Characterizing ...
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