Efficient and Neutral Mechanisms in Almost Ex Ante Bargaining Problems

Jin Yeub Kim
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Jin Yeub Kim: Yonsei Univ

No 2020rwp-174, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: I consider two-person bargaining problems in which mechanism is selected at the almost ex ante stage-when there is some positive probability that players may have learned their private types-and the chosen mechanism is implemented at the interim stage. For these problems, I define almost ex ante incentive efficient mechanisms and apply the concept of neutral optima (Myerson 1984b). I show that those mechanisms may not be ex ante incentive efficient. This note suggests that ex ante incentive efficient mechanisms are not robust to a perturbation of the ex ante informational structure at the time of mechanism selection.

Keywords: Bargaining; Incomplete information; Mechanism selection; Almost ex ante stage; Incentive efficiency; Neutral optima (search for similar items in EconPapers)
JEL-codes: C71 C78 D74 D82 (search for similar items in EconPapers)
Pages: 36pages
Date: 2020-06
New Economics Papers: this item is included in nep-gth and nep-ore
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