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Neutral Optimum in Private-Values Settings

Author

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  • Tymofiy Mylovanov

  • Thomas Tröger

Abstract

We show that in informed-principal settings with generalized private values any neutral optimum (Myerson, 1983) is strongly neologism proof (Mylovanov and Tröger, 2012) and hence is a strong unconstrained Pareto optimum in the setting of Maskin and Tirole (1990). Thus, in any setting with a unique strongly neologism-proof solution this concept is equivalent to neutral optimum. We rely on the unifying concept of neo-optimum that we develop in the companion paper Mylovanov and Tröger (2026). The main step is to prove that any neo-optimum is strongly neologism-proof.

Suggested Citation

  • Tymofiy Mylovanov & Thomas Tröger, 2026. "Neutral Optimum in Private-Values Settings," CRC TR 224 Discussion Paper Series crctr224_2025_732, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2025_732
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp732
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    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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