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Information Revelation in Competing Mechanism Games

Andrea Attar, Eloisa Campioni, and Gwenaël Piaser

Abstract

We consider multiple-principal multiple-agent games of incomplete information. In this context, we show that restricting principals to propose truth-telling direct mechanisms is problematic: the best reply of a single principal to a given array of offers proposed by his rivals cannot always be represented through truth-telling mechanisms. We then show that if contracts are exclusive, truth-telling direct mechanisms are able to characterize best replies. This provides a rationale for the use of truth-telling direct mechanisms in the situation in which each agent can contract with at most one principal, that has been postulated in most economic applications.

JEL codes

  • D82: Asymmetric and Private Information • Mechanism Design

Reference

Andrea Attar, Eloisa Campioni, and Gwenaël Piaser, Information Revelation in Competing Mechanism Games, March 2010.

See also

Published in

March 2010