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A folk theorem for competing mechanisms

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  • Peters, Michael
  • Troncoso-Valverde, Cristián

Abstract

We provide a partial characterization of the set of outcome functions that can be supported as perfect Bayesian equilibrium in the recommendation game described in [T. Yamashita, Mechanism games with multiple principals and three or more agents, Econometrica 78 (2) (2010) 791–801]. We show that the set of outcome functions that can be supported is at least as large as the set supportable by a mechanism designer in the sense of Myerson (Myerson, 1979 [13]). We show how to support random and correlated outcomes as equilibrium outcomes in the recommendation game.

Suggested Citation

  • Peters, Michael & Troncoso-Valverde, Cristián, 2013. "A folk theorem for competing mechanisms," Journal of Economic Theory, Elsevier, vol. 148(3), pages 953-973.
  • Handle: RePEc:eee:jetheo:v:148:y:2013:i:3:p:953-973
    DOI: 10.1016/j.jet.2013.01.001
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    References listed on IDEAS

    as
    1. Michael Peters & Balázs Szentes, 2012. "Definable and Contractible Contracts," Econometrica, Econometric Society, vol. 80(1), pages 363-411, January.
    2. Tennenholtz, Moshe, 2004. "Program equilibrium," Games and Economic Behavior, Elsevier, vol. 49(2), pages 363-373, November.
    3. Tomala, Tristan & Renou, Ludovic, 2012. "Mechanism design and communication networks," Theoretical Economics, Econometric Society, vol. 7(3), September.
    4. Takuro Yamashita, 2010. "Mechanism Games With Multiple Principals and Three or More Agents," Econometrica, Econometric Society, vol. 78(2), pages 791-801, March.
    5. Forges, Françoise & Vida, Péter, 2013. "Implementation of communication equilibria by correlated cheap talk: The two-player case," Theoretical Economics, Econometric Society, vol. 8(1), January.
    6. Kalai, Adam Tauman & Kalai, Ehud & Lehrer, Ehud & Samet, Dov, 2010. "A commitment folk theorem," Games and Economic Behavior, Elsevier, vol. 69(1), pages 127-137, May.
    7. Tomala, Tristan & Renou, Ludovic, 2012. "Mechanism design and communication networks," Theoretical Economics, Econometric Society, vol. 7(3), September.
    8. Myerson, Roger B, 1979. "Incentive Compatibility and the Bargaining Problem," Econometrica, Econometric Society, vol. 47(1), pages 61-73, January.
    9. Tomala, Tristan & Renou, Ludovic, 2012. "Mechanism design and communication networks," Theoretical Economics, Econometric Society, vol. 7(3), September.
    10. Gerardi, Dino, 2004. "Unmediated communication in games with complete and incomplete information," Journal of Economic Theory, Elsevier, vol. 114(1), pages 104-131, January.
    11. Tomala, Tristan & Renou, Ludovic, 2012. "Mechanism design and communication networks," Theoretical Economics, Econometric Society, vol. 7(3), September.
    12. Epstein, Larry G. & Peters, Michael, 1999. "A Revelation Principle for Competing Mechanisms," Journal of Economic Theory, Elsevier, vol. 88(1), pages 119-160, September.
    13. Forges, Francoise M, 1986. "An Approach to Communication Equilibria," Econometrica, Econometric Society, vol. 54(6), pages 1375-1385, November.
    14. Tomala, Tristan & Renou, Ludovic, 2012. "Mechanism design and communication networks," Theoretical Economics, Econometric Society, vol. 7(3), September.
    15. Claudio Mezzetti, 2004. "Mechanism Design with Interdependent Valuations: Efficiency," Econometrica, Econometric Society, vol. 72(5), pages 1617-1626, September.
    16. Tomala, Tristan & Renou, Ludovic, 2012. "Mechanism design and communication networks," Theoretical Economics, Econometric Society, vol. 7(3), September.
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    Citations

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    Cited by:

    1. Jehiel, Philippe & Lamy, Laurent, 2015. "A mechanism design approach to the Tiebout hypothesis," CEPR Discussion Papers 10758, C.E.P.R. Discussion Papers.
    2. Han, Seungjin, 2015. "Robust competitive auctions," Economics Letters, Elsevier, vol. 136(C), pages 207-210.
    3. Alessandro Pavan & Giacomo Calzolari, 2010. "Truthful Revelation Mechanisms for Simultaneous Common Agency Games," American Economic Journal: Microeconomics, American Economic Association, vol. 2(2), pages 132-190, May.
    4. Han, Seungjin, 2014. "Implicit collusion in non-exclusive contracting under adverse selection," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 85-95.
    5. Gorkem Celik & Michael Peters, 2016. "Reciprocal relationships and mechanism design," Canadian Journal of Economics, Canadian Economics Association, vol. 49(1), pages 374-411, February.
    6. Lester, Benjamin & Visschers, Ludo & Wolthoff, Ronald, 2015. "Meeting technologies and optimal trading mechanisms in competitive search markets," Journal of Economic Theory, Elsevier, vol. 155(C), pages 1-15.
    7. Peters, Michael, 2010. "On the Revelation Principle and Reciprocal Mechanisms in Competing Mechanism Games," Microeconomics.ca working papers michael_peters-2010-18, Vancouver School of Economics, revised 19 Feb 2014.
    8. Han Seungjin, 2016. "Sellers’ Implicit Collusion in Directed Search Markets," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 711-738, June.
    9. James Albrecht & Pieter A. Gautier & Susan Vroman, 2014. "Efficient Entry in Competing Auctions," American Economic Review, American Economic Association, vol. 104(10), pages 3288-3296, October.
    10. Andrea Attar & Eloisa Campioni & Gwenaël Piaser & Uday Rajan, 2012. "Competing mechanism games of moral hazard: communication and robustness," Review of Economic Design, Springer;Society for Economic Design, vol. 16(4), pages 283-296, December.
    11. Lester, Benjamin & Visschers, Ludo & Wolthoff, Ronald, 2014. "Meeting technologies and optimal trading mechanisms in competitive search markets," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-36, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Han, Seungjin, 2012. "On take it or leave it offers in common agency," Economics Letters, Elsevier, vol. 117(3), pages 777-781.
    13. Koessler, Frédéric & Lambert-Mogiliansky, Ariane, 2013. "Committing to transparency to resist corruption," Journal of Development Economics, Elsevier, vol. 100(1), pages 117-126.
    14. Seungjin Han, 2015. "Competing Mechanisms: Theory and Applications in Directed Search Markets," Department of Economics Working Papers 2015-07, McMaster University, revised May 2016.
    15. Cristian Troncoso-Valverde, 2013. "Competing Auctions with Heterogeneous Goods," Working Papers 46, Facultad de Economía y Empresa, Universidad Diego Portales.
    16. Peters, Michael, 2015. "Reciprocal contracting," Journal of Economic Theory, Elsevier, vol. 158(PA), pages 102-126.
    17. Michael Peters & Balázs Szentes, 2012. "Definable and Contractible Contracts," Econometrica, Econometric Society, vol. 80(1), pages 363-411, January.
    18. repec:ubc:pmicro:michael_peters-2015-8 is not listed on IDEAS
    19. Peters, Michael, 2014. "Competing Mechanisms," Microeconomics.ca working papers michael_peters-2014-7, Vancouver School of Economics, revised 19 Feb 2014.

    More about this item

    Keywords

    Competing mechanisms; Collusion; Implementable;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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