The Role of the Common Prior in Robust Implementation
AbstractWe consider the role of the common prior for robust implementation in an environment with interdependent values. Specifically, we investigate a model of public good provision which allows for negative and positive informational externalities. In the corresponding direct mechanism, the agents' reporting strategies are strategic complements with negative informational externalities and strategic substitutes with positive informational externalities. We derive the necessary and sufficient conditions for robust implementation in common prior type spaces and contrast this with our earlier results without the common prior. In the case of strategic complements the necessary and sufficient conditions for robust implementation do not depend on the existence of a common prior. In contrast, with strategic substitutes, the implementation conditions are much weaker under the common prior assumption.
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Bibliographic InfoPaper provided by UCLA Department of Economics in its series Levine's Bibliography with number 122247000000001574.
Date of creation: 24 Sep 2007
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Other versions of this item:
- Dirk Bergemann & Stephen Morris, 2008. "The Role of the Common Prior in Robust Implementation," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 551-559, 04-05.
- Dirk Bergemann & Stephen Morris, 2007. "The Role of the Common Prior in Robust Implementation," Cowles Foundation Discussion Papers 1628, Cowles Foundation for Research in Economics, Yale University.
- C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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