Efficient Allocations in Economies with Asymmetric Information when the Realized Frequency of Types is Common Knowledge

Aristotelis Boukouras () and Kostas Koufopoulos ()

No 15/04, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: We consider a general economy, where agents have private information about their types. Types can be multi-dimensional and potentially interdependent. We show that, if the realized frequency of types (the exact number of agents for each type) is common knowledge, then a mechanism exists, which is consistent with truthful revelation of private information and which implements first-best allocations of resources as the unique equilibrium. The result requires the single crossing property on utility functions and the anonymity of the Pareto correspondence.

Keywords: adverse selection; first-best; full implementation; mechanism design; single-crossing property (search for similar items in EconPapers)
JEL-codes: D71 D82 D86 (search for similar items in EconPapers)
Date: 2015-04
New Economics Papers: this item is included in nep-cta, nep-gth, nep-knm and nep-mic
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Citations: View citations in EconPapers (1)

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