Economics at your fingertips  

Persuasion in an asymmetric information economy: a justification of Wald’s maxmin preferences

Zhiwei Liu () and Nicholas C. Yannelis ()
Additional contact information
Zhiwei Liu: Capital University of Economics and Business
Nicholas C. Yannelis: The University of Iowa

Economic Theory, 2021, vol. 72, issue 3, No 7, 833 pages

Abstract: Abstract To justify the use of Wald’s maxmin preferences in an asymmetric information economy, we introduce a mechanism designer who can convince/persuade agents to adopt Wald’s maxmin preferences. We show that more efficient and individually rational allocations become incentive compatible if the mechanism designer persuades agents to use Wald’s maxmin preferences instead of Bayesian preferences. Thus, we justify the Wald’s maxmin preferences by showing that agents can be persuaded to use them in order to enlarge the set of efficient, individually rational and incentive compatible allocations.

Keywords: Persuasion; Efficient; Individually rational; Incentive compatibility; Wald’s maxmin preferences (search for similar items in EconPapers)
JEL-codes: D51 D81 D82 D83 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-021-01364-7

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2022-01-04
Handle: RePEc:spr:joecth:v:72:y:2021:i:3:d:10.1007_s00199-021-01364-7