Local incentive compatibility in non-convex type-spaces

Souvik Roy and Ujjwal Kumar

MPRA Paper from University Library of Munich, Germany

Abstract: We explore the equivalence of local incentive compatibility (LIC) (Carroll (2012)) and incentive compatibility (IC) in non-convex type-spaces. We provide a sufficient condition on a type-space called minimal richness for the said equivalence. Using this result, we show that LIC and IC are equivalent on large class of non-convex type-spaces such as type-spaces perturbed by modularity and concave-modularity. The gross substitutes type-space and the generalized gross substitutes and complements type-space are important examples of type-spaces perturbed by modularity and concave-modularity, respectively. Finally, we provide a geometric property consisting of three conditions for the equivalence of LIC and IC, and show that all the conditions are indispensable.

Keywords: local incentive compatibility; (global) incentive compatibility; non-convex type-spaces; minimally rich type-spaces; gross substitutes type-space; generalized gross substitutes and complements type-space (search for similar items in EconPapers)
JEL-codes: D44 D47 D82 (search for similar items in EconPapers)
Date: 2021-11-30
New Economics Papers: this item is included in nep-mic
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