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AGGREGATION OF TOTALLY POSITIVE DISTRIBUTIONS IN ECONOMICS
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  • Abstract: This paper studies a class of multidimensional screening models where different type dimensions can be aggregated into a single-dimensional sufficient statistic. The paper applies results of totally positive functions to show that some critical properties of distributions of asymmetric information parameters, such as increasing hazard rate, monotone likelihood ratio, and single-peakedness are preserved under convolution or composition. Under some general conditions, these invariance results also provide a natural ordering of alternative screening mechanisms. I illustrate how these preservation results provide a unifying framework in which to interpret several contributions in models of asymmetric information.

  • Publication: Mimeo.

  • JEL: C00, D42, D82.

  • First version: June 2010.

  • Current version: June 2010.

  • Funding: None.

  • Seminars: University of Pennsylvania.

  • Conferences: None yet .

  • Presentations: PDF.

  • Media Citations: None yet.

  • Noteworthy: None.