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Keeping the Agents in the Dark: Competing Mechanisms, Private Disclosures, and the Revelation Principle

Author

Listed:
  • Andrea Attar
  • Eloisa Campioni
  • Thomas Mariotti
  • Alessandro Pavan

Abstract

We study the design of market information in competing-mechanism games. We identify a new dimension, private disclosures, whereby the principals asymmetrically inform the agents of how their mechanisms operate. We show that private disclosures have two important effects. First, they can raise a principal's payoff guarantee against her competitors' threats. Second, they can support equilibrium outcomes and payoffs that cannot be supported with standard mechanisms. These results call for a novel approach to competing mechanisms, which we develop to identify a canonical game and a canonical class of equilibria, thereby establishing a new revelation principle for this class of environments.

Suggested Citation

  • Andrea Attar & Eloisa Campioni & Thomas Mariotti & Alessandro Pavan, 2025. "Keeping the Agents in the Dark: Competing Mechanisms, Private Disclosures, and the Revelation Principle," CESifo Working Paper Series 11991, CESifo.
    • Handle: RePEc:ces:ceswps:_11991
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    References listed on IDEAS

    as
    1. Peters, Michael & Troncoso-Valverde, Cristián, 2013. "A folk theorem for competing mechanisms," Journal of Economic Theory, Elsevier, vol. 148(3), pages 953-973.
    2. Epstein, Larry G. & Peters, Michael, 1999. "A Revelation Principle for Competing Mechanisms," Journal of Economic Theory, Elsevier, vol. 88(1), pages 119-160, September.
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    JEL classification:

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

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