Informational smallness and the scope for limiting information rents
AbstractFor an incomplete-information model of public-good provision with interim participation constraints, we show that efficient outcomes can be approximated, with approximately full surplus extraction, when there are many agents and each agent is informationally small. The result holds even if agents' payoffs cannot be unambiguously inferred from their beliefs. The contrary result of Neeman [Z. Neeman, The relevance of private information in mechanism design, J. Econ. Theory 117 (2004) 55-77] rests on an implicit uniformity requirement that is incompatible with the notion that agents are informationally small because there are many other agents who have information about them.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 145 (2010)
Issue (Month): 6 (November)
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Web page: http://www.elsevier.com/locate/inca/622869
Surplus extraction Mechanism design BDP Informational smallness Correlated information Universal type space Public goods;
Other versions of this item:
- Alia Gizatulina & Martin Hellwig, 2009. "Informational Smallness and the Scope for Limiting Information Rents," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2009_28, Max Planck Institute for Research on Collective Goods.
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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