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Mechanism Design with Weaker Incentive Compatibility Constraints


  • Celik, Gorkem


We study an adverse selection problem, where an agent is able to understate his productivity, but not allowed to overstate it. The solution to this problem is generally different than the solution to the standard problem, where no restriction is made on the statements of the agent. We identify a sufficient condition, that does not depend on the distribution of types, under which these two solutions coincide.

Suggested Citation

  • Celik, Gorkem, 2004. "Mechanism Design with Weaker Incentive Compatibility Constraints," working papers celik-04-09-13-05-50-40, Vancouver School of Economics, revised 06 Aug 2008.
  • Handle: RePEc:ubc:pmicro:celik-04-09-13-05-50-40

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    References listed on IDEAS

    1. Matthews, Steven & Moore, John, 1987. "Monopoly Provision of Quality and Warranties: An Exploration in the Theory of Multidimensional Screening," Econometrica, Econometric Society, vol. 55(2), pages 441-467, March.
    2. Deneckere,R. & Severinov,S., 2001. "Mechanism design and communication costs," Working papers 23, Wisconsin Madison - Social Systems.
    3. Jerry R. Green & Jean-Jacques Laffont, 1986. "Partially Verifiable Information and Mechanism Design," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 447-456.
    4. Giovanni Maggi & Andres Rodriguez-Clare, 1995. "Costly Distortion of Information in Agency Problems," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 675-689, Winter.
    5. John Moore, 1988. "Contracting Between Two Parties with Private Information," Review of Economic Studies, Oxford University Press, vol. 55(1), pages 49-69.
    6. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, January.
    7. Lu Hong & Scott Page, 1994. "Reducing informational costs in endowment mechanisms," Review of Economic Design, Springer;Society for Economic Design, vol. 1(1), pages 103-117, December.
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    Cited by:

    1. Alistair Munro, 2014. "Hide and Seek: A Theory of Efficient Income Hiding within the Household," GRIPS Discussion Papers 14-17, National Graduate Institute for Policy Studies.
    2. Sher, Itai & Vohra, Rakesh, 2015. "Price discrimination through communication," Theoretical Economics, Econometric Society, vol. 10(2), May.

    More about this item


    Mechanism Design; Incentive Compatibility;

    JEL classification:

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

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