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Mechanism design with weaker incentive compatibility constraints

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  • Celik, Gorkem

Abstract

We study an adverse selection problem, where an agent is able to understate his productivity, but not allowed to overstate it. The solution to this problem is generally different than the solution to the standard problem, where no restriction is made on the statements of the agent. We identify a sufficient condition, that does not depend on the distribution of types, under which these two solutions coincide.

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File URL: http://www.sciencedirect.com/science/article/B6WFW-4H9PN5J-3/2/9acf7cfc0dbff439c8a268278ffe6fd8
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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 56 (2006)
Issue (Month): 1 (July)
Pages: 37-44

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Handle: RePEc:eee:gamebe:v:56:y:2006:i:1:p:37-44

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Web page: http://www.elsevier.com/locate/inca/622836

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  1. Moore, John, 1988. "Contracting between Two Parties with Private Information," Review of Economic Studies, Wiley Blackwell, vol. 55(1), pages 49-69, January.
  2. Green, Jerry R & Laffont, Jean-Jacques, 1986. "Partially Verifiable Information and Mechanism Design," Review of Economic Studies, Wiley Blackwell, vol. 53(3), pages 447-56, July.
  3. Giovanni Maggi & Andres Rodriguez-Clare, 1995. "Costly Distortion of Information in Agency Problems," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 675-689, Winter.
  4. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, January.
  5. Deneckere,R. & Severinov,S., 2001. "Mechanism design and communication costs," Working papers 23, Wisconsin Madison - Social Systems.
  6. Lu Hong & Scott Page, 1994. "Reducing informational costs in endowment mechanisms," Review of Economic Design, Springer, vol. 1(1), pages 103-117, December.
  7. Steven Matthews & John Moore, 1985. "Monopoly Provision of Quality and Warranties: An Exploration in the Theory of Multidimensional Screening," Discussion Papers 661, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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Cited by:
  1. Itai Sher & Rakesh Vohra, 2011. "Price Discrimination Through Communication," Discussion Papers 1536, Northwestern University, Center for Mathematical Studies in Economics and Management Science.

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