Mechanism Design and Non-Cooperative Renegotiation
AbstractWe characterize decision rules which are implementable in mechanism design settings when, after the play of a mechanism, the uninformed party can propose a new mechanism to the informed party. The necessary and sufficient conditions are, essentially, that the rule be implementable with commitment, that for each type the decision is at least as high as if there were no mechanism, and that the slope of the decision function is not too high. The direct mechanism which implements such a rule with commitment will also implement it in any equilibrium without commitment, so the standard mechanism is robust to renegotiation.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 1331.
Date of creation: 19 Sep 2013
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Renegotiation; Mechanism Design;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-26 (All new papers)
- NEP-CDM-2013-09-26 (Collective Decision-Making)
- NEP-CTA-2013-09-26 (Contract Theory & Applications)
- NEP-GTH-2013-09-26 (Game Theory)
- NEP-MIC-2013-09-26 (Microeconomics)
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