Finding an optimal mechanism in a standard adverse selection model is equivalent to solving an infinite dimensional linear program. We begin with certain feasible mechanisms—those implemented by auctions, take-it-or-leave-it offers, and combinations of these polar mechanisms—and search for the environments that make them optimal. We prove the optimality of each mechanism using the dual program.
Duality in Procurement DesignAlejandro Manelli and Daniel R. Vincent ,
3( 40 )
Journal of Mathematical Economics