Journal article

Informed-Principal Problems In Environments With Generalized Private Values

Year:

2012

Published in:

Theoretical Economics
Mechanism selection
Privately informed principal
Perfect-Bayesian equilibrium
Neologism-proofness

We provide a solution to the problem of mechanism selection by a privately informed principal in generalized-private-value environments. In a broad class of these environments, the mechanism-selection game has a perfect-Bayesian equilibrium that has a strong neologism-proofness property. Equilibrium allocations that satisfy this property are characterized in terms of the players' incentive and participation constraints, and can be computed using standard methods.

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