IDEAS home Printed from https://ideas.repec.org/a/spr/joecth/v80y2025i4d10.1007_s00199-025-01656-2.html
   My bibliography  Save this article

Full surplus extraction and consideration sets

Author

Listed:
  • Nicolas Pastrian

    (University of Turin)

Abstract

We analyze the surplus extraction problem in a mechanism design setting with consideration sets. We study a bounded rationality version of a general mechanism design environment with correlation in which the agent evaluates only a subset of types as possible deviations. We call these subsets the agent’s consideration sets. We identify the inverse consideration sets as the key elements that determine whether full extraction is feasible in this setting and characterize the conditions beliefs need to satisfy to guarantee full surplus extraction. These conditions require the beliefs of each type to be separated from the beliefs of types in his inverse consideration set only. This relaxes the independence condition in Crémer and McLean (1988), which remains sufficient in our setting. Finally, we discuss some applications and limitations of our model.

Suggested Citation

  • Nicolas Pastrian, 2025. "Full surplus extraction and consideration sets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 80(4), pages 1233-1265, December.
    • Handle: RePEc:spr:joecth:v:80:y:2025:i:4:d:10.1007_s00199-025-01656-2
    DOI: 10.1007/s00199-025-01656-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00199-025-01656-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00199-025-01656-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:80:y:2025:i:4:d:10.1007_s00199-025-01656-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.