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Title:Mechanism Design by an Informed Principal: Pure-Strategy Equilibria for a Common Value Model PDF Logo
Authors:Tisljar, Rolf
Issue Date:2002
Series/Report no.:Bonn econ discussion papers 2002,21
Abstract:We present a common value mechanism design model for an informed principal where only the principal has private information, but her one-dimensional private information is allowed to be distributed according to any probability measure. For this model we characterize the set of pure-strategy perfect Bayesian equilibria. Furthermore, we present several equilibrium refinements based on the concept of equilibrium domination to take account of beliefs off the equilibrium path. Finally, we demonstrate that the extension of the strong solution of Myerson (Econometrica, 1983) to our model is supported as an equilibrium satisfying all refinement criteria presented (in case a strong solution exists).
Subjects:equilibrium refinement
infinite signaling game
informed principal
mechanism design
perfect Bayesian equilibrium
principle of inscrutability
Document Type:Working Paper
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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