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AGGREGATION OF TOTALLY POSITIVE DISTRIBUTIONS IN ECONOMICS
(Click above to download a pdf copy of the paper)
- 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.
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