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Under the optimal contract, the agent is neither saving nor borrowing constrained.
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First, the optimal contract under adverse selection is modeled.
We summarize the optimal contract under the outlier payment policy as follows.
As shown in the analysis, the fraction affects the optimal contract under the patient dumping policy.
In Section 3, we propose the optimal contract under complete information.
For the optimal contract under complete information, the average data rate is monotonically increasing with respect to θ.
Furthermore, we can see that the relay gains more revenue from the optimal contract under incomplete information.
The cooperative gain, relay's revenue, and expected data rate are characterized for the optimal contract under complete information and incomplete information.
Further, we have characterize cooperative gain, relay's revenue, and expected data rate in the optimal contract under complete information and incomplete information.
We characterize cooperative gain (i.e., social surplus), relay's revenue, and expected data rate in the optimal contract under complete information and incomplete information.
In Figure 6, we can see that the relay gains more revenue from the optimal contract under incomplete information, at the expense of social surplus decreasing caused by the dropping out of low type sources.
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