Mechanism design with private communication

Vianney Dequiedt () and David Martimort

Working Papers from Grenoble Applied Economics Laboratory (GAEL)

Abstract: We investigate the consequences of assuming "private" communication between the principal and each of his agents in an otherwise standard mechanism design setting.Doing so simplifies significantly optimal mechanisms and institutions. Moreover, it restores continuity of the principal's payoff and of the optimal mechanism with respect to the information structure while still maintaining the useful role of correlation to better extract the agents' information rent. We first prove a "Revelation Principle with private communication" that characterizes the set of allocations implementable under private communication by means of simple "non-manipulability constraints". We also demonstrate a "Taxation Principle" which helps drawing some links between private communication and limited commitment on the principal's side. Equipped with those tools, we derive optimal non-manipulable mechanisms in various environments (unrelated projects, auctions, team production).

Keywords: MECHANISM DESIGN; PRIVATE COMMUNICATION (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-ppm
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://gael.univ-grenoble-alpes.fr/sites/default/ ... 2007/gael2007-03.pdf (application/pdf)

Related works:
Working Paper: Mechanism Design with Private Communication (2007)
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: https://EconPapers.repec.org/RePEc:gbl:wpaper:200702

Access Statistics for this paper

More papers in Working Papers from Grenoble Applied Economics Laboratory (GAEL) Contact information at EDIRC.
Bibliographic data for series maintained by Adrien Hervouet ().