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A note on budget balance under interim participation constraints: the case of independent types

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  • Tilman Börgers

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  • Peter Norman

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Abstract

We provide a simple proof of the equivalence between ex ante and ex post budget balance constraints in Bayesian mechanism design with independent types when participation decisions are made at the interim stage. The result is given an interpretation in terms of efficient allocation of risk.
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Suggested Citation

  • Tilman Börgers & Peter Norman, 2009. "A note on budget balance under interim participation constraints: the case of independent types," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(3), pages 477-489, June.
  • Handle: RePEc:spr:joecth:v:39:y:2009:i:3:p:477-489
    DOI: 10.1007/s00199-008-0347-7
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bierbrauer, Felix J., 2011. "Incomplete contracts and excludable public goods," Journal of Public Economics, Elsevier, vol. 95(7), pages 553-569.
    2. Hanming Fang & Peter Norman, 2014. "Toward an efficiency rationale for the public provision of private goods," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 375-408, June.
    3. Serkan Kucuksenel, 2012. "Interim efficient auctions with interdependent valuations," Journal of Economics, Springer, vol. 106(1), pages 83-93, May.
    4. Hanming Fang & Peter Norman, 2010. "Optimal Provision of Multiple Excludable Public Goods," American Economic Journal: Microeconomics, American Economic Association, vol. 2(4), pages 1-37, November.
    5. Tröger, Thomas & Mylovanov, Timofiy, 2012. "Mechanism design by an informed principal: the quasi-linear private-values case," Working Papers 12-14, University of Mannheim, Department of Economics.
    6. Bierbrauer, Felix & Netzer, Nick, 2016. "Mechanism design and intentions," Journal of Economic Theory, Elsevier, vol. 163(C), pages 557-603.
    7. Jarman, Felix & Meisner, Vincent, 2017. "Ex-post optimal knapsack procurement," Journal of Economic Theory, Elsevier, vol. 171(C), pages 35-63.
    8. Hakenes, Hendrik & Schnabel, Isabel, 2006. "The Threat of Capital Drain: A Rationale for Public Banks?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 107, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    9. Rong, Kang, 2014. "Proportional individual rationality and the provision of a public good in a large economy," Journal of Mathematical Economics, Elsevier, vol. 51(C), pages 187-196.
    10. Bartling, Björn & Netzer, Nick, 2016. "An externality-robust auction: Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 97(C), pages 186-204.
    11. Aurélie Slechten, 2015. "Environmental agreements under asymmetric information," Working Papers 95042257, Lancaster University Management School, Economics Department.
    12. Ludwig Ensthaler & Thomas Giebe, 2010. "How to allocate Research (and other) Subsidies," Discussion Papers 1517, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    13. Ensthaler, Ludwig & Giebe, Thomas, 2014. "Bayesian optimal knapsack procurement," European Journal of Operational Research, Elsevier, vol. 234(3), pages 774-779.
    14. Stefano Barbieri & David Malueg, 2014. "Group efforts when performance is determined by the “best shot”," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 333-373, June.
    15. Alexey Kushnir & Shuo Liu, 2015. "On the equivalence of bayesian and dominant strategy implementation: the case of non-linear utilities," ECON - Working Papers 212, Department of Economics - University of Zurich.
    16. Eilat, Ran & Pauzner, Ady, 2011. "Optimal bilateral trade of multiple objects," Games and Economic Behavior, Elsevier, vol. 71(2), pages 503-512, March.

    More about this item

    Keywords

    Mechanism design; Budget balance; Participation constraints; D02; D70; D82;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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