Definable and Contractible Contracts
AbstractThis paper analyzes Bayesian normal form games in which players write contracts that condition their actions on the contracts of the other players. These contracts are required to be representable in a formal language. This is accomplished by constructing contracts which are definable functions of the Godel code of every other player's contract. We provide a complete characterization of the set of allocations supportable as pure strategy Bayesian equilibrium of this contracting game. When information is complete, this characterization provides a folk theorem. In general, the set of supportable allocations is smaller than the set supportable by a centralized mechanism designer.
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Bibliographic InfoPaper provided by Microeconomics.ca Website in its series Micro Theory Working Papers with number michael_peters-2009-7.
Length: 0 pages
Date of creation: 22 Jan 2009
Date of revision: 13 May 2010
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Other versions of this item:
- NEP-ALL-2009-01-31 (All new papers)
- NEP-CTA-2009-01-31 (Contract Theory & Applications)
- NEP-GTH-2009-01-31 (Game Theory)
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- Andrea Attar & Eloisa Campioni & Gwenael Piaser, 2011. "Information Revelation in Competing Mechanism Games," CEIS Research Paper 205, Tor Vergata University, CEIS, revised 04 Jul 2011.
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