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Mechanism Design with Weaker Incentive Compatibility Constraints

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  • Celik, Gorkem

Abstract

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," Microeconomics.ca 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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    File URL: http://microeconomics.ca/gorkem_celik/wic0504.pdf
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    References listed on IDEAS

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    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.
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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.
    3. Ivan Balbuzanov, 2019. "Lies and consequences," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(4), pages 1203-1240, December.
    4. Sumit Goel & Wade Hann-Caruthers, 2020. "Project selection with partially verifiable information," Papers 2007.00907, arXiv.org.

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    More about this item

    Keywords

    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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