The genericity of beliefs-determine-preferences models revisited

Yi-Chun Chen () and Siyang Xiong

Journal of Economic Theory, 2011, vol. 146, issue 2, pages 751-761

Abstract: Barelli [P. Barelli, On the genericity of full surplus extraction in mechanism design, J. Econ. Theory 144 (2009) 1320-1332] defines beliefs-determine-preferences (BDP) models and argues that BDP models are nongeneric in a topological sense. In this note, we point out some difficulties in Barelli[modifier letter apostrophe]s approach. Furthermore, we follow the idea of Heifetz and Neeman [A. Heifetz, Z. Neeman, On the generic (im)possibility of full surplus extraction, Econometrica 74 (2006) 213-233] to propose a more relevant notion of BDP* model. We prove that BDP* models are generic, which is opposite to Barelli[modifier letter apostrophe]s conclusion.

Keywords: Mechanism; design; Full; surplus; extraction; Beliefs-determine-preferences; priors; Common; priors (search for similar items in EconPapers)
Date: 2011
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Persistent link: http://EconPapers.repec.org/RePEc:eee:jetheo:v:146:y:2011:i:2:p:751-761

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