The Generic Possibility of Full Surplus Extraction in Models with Large Type Spaces

Alia Gizatulina () and Martin Hellwig
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Alia Gizatulina: Max Planck Institute for Research on Collective Goods

No 2017_02, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: McAfee and Reny (1992) have given a necessary and sufficient condition for full surplus extraction in naive type spaces with a continuum of payoff types. We generalize their characterization to arbitrary abstract type spaces and to the universal type space and show that in each setting, full surplus extraction is generically possible. We interpret the McAfee-Reny condition as a much stronger version of injectiveness of belief functions and prove genericity by arguments similar to those used to prove the classical embedding theorem for continuous functions. Our results can be used to also establish the genericity of common priors that admit full surplus extraction.

Keywords: mechanism design; surplus extraction; abstract type spaces; universal type space; genericity; correlated values; correlated information; strategic continuity (search for similar items in EconPapers)
JEL-codes: D40 D44 D80 D82 (search for similar items in EconPapers)
Date: 2017-02, Revised 2017-05-25
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (5)

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Journal Article: The generic possibility of full surplus extraction in models with large type spaces (2017)
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