Events at CERGE-EI
Wednesday, 11 December, 2024 | 14:00 | Room 6 | Micro Theory Research Seminar
Alessandro Pavan (Northwestern University) "Keeping the Agents in the Dark: Private Disclosures in Competing Mechanisms"
Northwestern University, United States
Authors: Alessandro Pavan, Andrea Attar, Eloisa Campioni and Thomas Mariotti
Abstract: We study the design of market information in competing-mechanisms games. We show that private disclosures, whereby principals asymmetrically inform agents of how their mechanisms operate, have two effects. First, they raise principals’ individual payoff guarantees, protecting them against their competitors’ threats. Second, they support equilibrium payoffs that cannot be supported via standard mechanisms. These results challenge the folk theorems á la Yamashita (2010) and the canonicity of universal mechanisms of Epstein and Peters (1999). We propose a new approach to competingmechanism games retaining key elements of classical mechanism-design theory while exploiting private disclosures to simplify the description of equilibrium communication.
