First Best Implementation With Costly Information Acquisition

Daniil Larionov, Hien Pham, Takuro Yamashita and Shuguang Zhu

Journal of Economics & Management Strategy, 2025, vol. 34, issue 4, 889-898

Abstract: We study mechanism design with flexible but costly information acquisition. There is one principal and four or more agents, who share a common prior belief over a set of payoff‐relevant states. The principal proposes a mechanism to the agents, each of whom can then acquire information about the state by privately designing a signal device. As long as it is costless for each agent to acquire a signal that is independent of the state, there exists a mechanism that allows the principal to implement any social choice rule at zero information acquisition cost for the agents.

Date: 2025
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https://doi.org/10.1111/jems.12628

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:34:y:2025:i:4:p:889-898

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