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A note on Pareto optimality in differential information economies

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  • FORGES, F.

Abstract

A mechanism is posterior efficient in a differential information economy if at every outcome selected by the mechanism, the agents' expected utilities given this outcome cannot be Pareto improved by any feasible mechanism (in the revised economy). We show that a non-revealing (resp. completely revealing) mechanism is posterior efficient if and only if it is incentive interim efficient (resp. ex post efficient). The various efficiency concepts are illustrated in a simple adverse selection model.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Forges, F., 1994. "A note on Pareto optimality in differential information economies," CORE Discussion Papers RP 1111, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvrp:1111 Note: In : Economics Letters, 46, 27-31, 1994
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    File URL: http://dx.doi.org/10.1016/0165-1765(94)90073-6
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    References listed on IDEAS

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    1. Fershtman, Chaim & Judd, Kenneth L, 1987. "Equilibrium Incentives in Oligopoly," American Economic Review, American Economic Association, pages 927-940.
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    5. Hellwig, Martin & Leininger, Wolfgang & Reny, Philip J. & Robson, Arthur J., 1990. "Subgame perfect equilibrium in continuous games of perfect information: An elementary approach to existence and approximation by discrete games," Journal of Economic Theory, Elsevier, vol. 52(2), pages 406-422, December.
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    8. Mathias Dewatripont, 1988. "Commitment through renegotiation-proof contacts with third parties," ULB Institutional Repository 2013/9569, ULB -- Universite Libre de Bruxelles.
    9. repec:fth:harver:1502 is not listed on IDEAS
    10. Caillaud, Bernard & Jullien, B & Picard, P, 1995. "Competing Vertical Structures: Precommitment and Renegotiation," Econometrica, Econometric Society, vol. 63(3), pages 621-646, May.
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    Cited by:

    1. Ray, Indrajit, 1996. "Efficiency in correlated equilibrium," Mathematical Social Sciences, Elsevier, vol. 32(3), pages 157-178, December.
    2. Vohra, Rajiv, 1999. "Incomplete Information, Incentive Compatibility, and the Core," Journal of Economic Theory, Elsevier, vol. 86(1), pages 123-147, May.
    3. Dutta, Bhaskar & Vohra, Rajiv, 2005. "Incomplete information, credibility and the core," Mathematical Social Sciences, Elsevier, vol. 50(2), pages 148-165, September.
    4. Krasa, Stefan, 1999. "Unimprovable Allocations in Economies with Incomplete Information," Journal of Economic Theory, Elsevier, vol. 87(1), pages 144-168, July.

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