We consider the problem of mechanism design by a principal who has private information. We point out a simple condition under which the privacy of the principal's information is irrelevant in the sense that the mechanism implemented by the principal coincides with the mechanism that would be optimal if the principal's information were publicly known. This condition is then used to show that the privacy of the principal's information is irrelevant in many environments with private values and quasi-linear preferences, including the Myerson's classical auction environments in which the seller is privately informed about her cost of selling. Our approach unifies results by Maskin and Tirole, Tan, Yilankaya, Skreta, and Balestrieri. We also provide an example of a classical principal-agent environment with private values and quasi-linear preferences where a privately informed principal can do better than when her information is public.
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Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number
bgse21_2008.
Length: 28 Date of creation: Dec 2008 Date of revision: Handle: RePEc:bon:bonedp:bgse21_2008
Contact details of provider: Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany Fax: +49 228 73 9221 Web page: http://www.bgse.uni-bonn.de/index.php?id=494
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Garratt, Rod & Troger, Thomas & Zheng, Charles Zhoucheng, 2007.
"Collusion via Resale,"
Staff General Research Papers
12829, Iowa State University, Department of Economics.
[Downloadable!]
Other versions:
Rodney J. Garratt & Thomas Tröger & Charles Z. Zheng, 2009.
"Collusion via Resale,"
Econometrica,
Econometric Society, vol. 77(4), pages 1095-1136, 07.
[Downloadable!] (restricted)
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