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

Author

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

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

  • Attar, Andrea & Campioni, Eloisa & Mariotti, Thomas & Pavan, Alessandro, 2025. "Keeping the Agents in the Dark: Competing Mechanisms, Private Disclosures, and the Revelation Principle," CEPR Discussion Papers 20450, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20450
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    File URL: https://cepr.org/publications/DP20450
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    More about this item

    JEL classification:

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

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