Keeping the Agents in the Dark: Private Disclosures in Competing Mechanisms

Attar, Andrea; Campioni, Eloisa; Mariotti, Thomas; Pavan, Alessandro

doi:10.2139/ssrn.3947186

Cited by 1 publication

(1 citation statement)

References 29 publications

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“…For this reason, the literature on competing principals (see, e.g., Attar, Campioni, Mariotti, and Pavan (2021a, 2021b)) follows a different approach: Theorem D in Aumann (1961) implies that the issues raised above would be mute if we restrict the principal to choosing mechanisms from a subset

{scriptM}^{'}

{scriptM}_{scriptI}

, such that

{scriptM}^{'}

is of bounded Borel class 23 . For the purposes of deriving a revelation principle, this approach is again insufficient: Borel classes are not always closed under composition (Srivastava (2008)) and we obtain a canonical mechanism by composing the agent's strategy with the mechanism the principal employs in the mechanism‐selection game.…”

Section: Continuum Type Spacesmentioning

confidence: 99%

Mechanism Design With Limited Commitment

Doval

Skreta

2022

ECTA

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We develop a tool akin to the revelation principle for dynamic mechanism‐selection games in which the designer can only commit to short‐term mechanisms. We identify a canonical class of mechanisms rich enough to replicate the outcomes of any equilibrium in a mechanism‐selection game between an uninformed designer and a privately informed agent. A cornerstone of our methodology is the idea that a mechanism should encode not only the rules that determine the allocation, but also the information the designer obtains from the interaction with the agent. Therefore, how much the designer learns, which is the key tension in design with limited commitment, becomes an explicit part of the design. Our result simplifies the search for the designer‐optimal outcome by reducing the agent's behavior to a series of participation, truth telling, and Bayes' plausibility constraints the mechanisms must satisfy.

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