Mechanism Design for Relationship Agreements

Frame the creation of relationship rules as a principal-agent problem, identifying potential moral hazard and adverse selection.

Apply the Revelation Principle to design contracts that incentivize partners to truthfully report their preferences and risk tolerance.

Draft a direct mechanism (contract) to solve a specific adverse selection problem, such as revealing true STI testing history.

Model moral hazard in situations with unobservable actions, like adherence to safe-sex protocols.

Design a relationship contract with rewards and penalties to ensure incentive-compatibility and enforce boundaries.

Describe the VCG (Vickrey-Clarke-Groves) mechanism and its potential application in group decision-making.