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Title:Informational smallness and the scope for limiting information rents PDF Logo
Authors:Gizatulina, Alia
Hellwig, Martin
Issue Date:2009
Series/Report no.:Preprints of the Max Planck Institute for Research on Collective Goods 2009,28
Abstract:For an incomplete-information model of public-good provision with interim participation constraints, we show that efficient outcomes can be approximated, with approximately full surplus extraction, when there are many agents and each agent is informationally small. The result holds even if agents' payoffs cannot be unambiguously inferred from their beliefs, i.e., even if the so-called BDP property (Beliefs Determine Preferences) of Neeman (2004) does not hold. The contrary result of Neeman (2004) rests on an implicit uniformity requirement that is incompatible with the notion that agents are informationally small because there are many other agents who have information about them.
Subjects:surplus extraction
mechanism design
BDP
informational smallness
correlated information
JEL:D40
D44
D80
D82
Document Type:Working Paper
Appears in Collections:Preprints of the Max Planck Institute for Research on Collective Goods

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