Tuesday, January 26, 2016
On Competing Mechanisms under Exclusive Competition
Attar, Andrea; Campioni, Eloisa andPiaser, Gwenael provide thoughtsOn Competing Mechanisms under Exclusive Competition.
ABSTRACT:We study games in which several principals design incentive schemes in the presence of privately informed agents. Competition is exclusive: each agent can participate with at most one principal, and principal-agents corporations are isolated. We analyze the role of standard incentive compatible mechanisms in these contexts. First, we provide a clarifying example showing how incentive compatible mechanisms fail to completely characterize equilibrium outcomes even if we restrict to pure strategy equilibria. Second, we show that truth-telling equilibria are robust against unilateral deviations toward arbitrary mechanisms. We then consider the single agent case and exhibit sufficient conditions for the validity of the revelation principle.
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