Resource title

Mechanism Design by an Informed Principal: Pure-Strategy Equilibria for a Common Value Model

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Resource description

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).

Resource author

Rolf Tisljar

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22842

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Adapt according to the presented license agreement and reference the original author.