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Informed Planner, Decentralized Decisions And Incentive Compatibility

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  • Manimay Sengupta

    (School of Economics, Kwansei Gakuin University)

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    Abstract

    The results on the design of incentive compatible mechanisms for implementing public decisions establish that there is no general solution to the incentive problem if the mechanisms are required to be informationally decentralized. However, even when the planner possesses the knowledge of the agents' characteristics, he may need to reach these decisions through a decentralized decision mechanism, in which the agents act in accordance with their incentives to select the public decision. Thus, even within a complete information model with an informed planner, one may need to find mechanisms that implement public decisions via decentralized decisions of the agents. We show that there exists a mechanism which resolves this problem.

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    File URL: http://192.218.163.163/RePEc/pdf/kgdp12.pdf
    File Function: First version, 1996
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    Bibliographic Info

    Paper provided by School of Economics, Kwansei Gakuin University in its series Discussion Paper Series with number 12.

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    Length: 30 pages
    Date of creation: Oct 1996
    Date of revision: Oct 1996
    Handle: RePEc:kgu:wpaper:12

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