Mechanism Design with Non-Contractible Information
A principal faces an agent with non-contractible information. The principal considers mechanisms with an informed manager. The main results show that a direct mechanism, by characterizing incentives of the manager, weakly dominates the optimal "selling the project" contract. The nature of incompleteness suggests a foundation of incomplete contract, the agent's information structure, and thus demands a different solution, an informational hierarchical structure with the manager. This result has new implications for the theory of the firm, as opposed to what the standard mechanism theory offers.
|Date of creation:||2016|
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- Eric Maskin & John Riley, 2000. "Asymmetric Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 413-438.
- Krishna, Vijay, 2009.
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- Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
- Dilip Mookherjee & Masatoshi Tsumagari, 2014. "Mechanism Design with Communication Constraints," Journal of Political Economy, University of Chicago Press, vol. 122(5), pages 1094-1129.
- William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
- Tirole, Jean, 1986. "Hierarchies and Bureaucracies: On the Role of Collusion in Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 181-214, Fall.
- Cremer, Jacques & McLean, Richard P, 1988. "Full Extraction of the Surplus in Bayesian and Dominant Strategy Auctions," Econometrica, Econometric Society, vol. 56(6), pages 1247-1257, November.
- Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374. Full references (including those not matched with items on IDEAS)
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