Communication Complexity and Mechanism Design
AbstractThe curse of the Revelation Principle is that it leads us to focus on unrealistic mechanisms in which agents report all private information to the principal, who then makes all decisions centrally. This is not true when communication costs are introduced. In that case, partial communication of information, sequential back-and-forth conversations, and decentralization of decisions become part of optimal mechanisms. This paper looks at the interplay between the incentive constraints and the communication constraints. When can they be separated so that, for example, one can separately study the incentive compatibility of a social choice rule and the minimum-cost communication protocol that realizes the social choice rule? (JEL: D82, C72) (c) 2007 by the European Economic Association.
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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 5 (2007)
Issue (Month): 2-3 (04-05)
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Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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- Tomala, Tristan & Renou, Ludovic, 2010.
"Mechanism design and communication networks,"
Les Cahiers de Recherche
926, HEC Paris.
- Timothy Van Zandt, 2008. "The Interplay Between Incentives and Communication Complexity in Mechanism Design," 2008 Meeting Papers 480, Society for Economic Dynamics.
- Dietrichson, Jens & Jochem, Torsten, 2014. "Organizational Coordination and Costly Communication with Boundedly Rational Agents," Working Papers 2014:2, Lund University, Department of Economics.
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