Mechanisms with Evidence: Commitment and Robustness

Elchanan Ben-Porath (), Eddie Dekel and Barton Lipman ()
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Elchanan Ben-Porath: Department of Economics and Center for Rationality, Hebrew University

No WP2017-001, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: We show that in a class of I-agent mechanism design problems with evidence, commitment is unnecessary, randomization has no value, and robust incentive compatibility has no cost. In particular, for each agent i, we construct a simple disclosure game between the principal and agent i where the equilibrium strategies of the agents in these disclosure games give their equilibrium strategies in the game corresponding to the mechanism but where the principal is not committed to his response. In this equilibrium, the principal obtains the same payo as in the optimal mechanism with commitment. As an application, we show that certain costly veri cation models can be characterized using equilibrium analysis of an associated model of evidence.

Pages: 63 pages
Date: 2017-01
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Citations: View citations in EconPapers (1)

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Journal Article: Mechanisms With Evidence: Commitment and Robustness (2019)
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