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Efficient and Neutral Mechanisms in Almost Ex Ante Bargaining Problems

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  • Jin Yeub Kim

    (Yonsei Univ)

Abstract

I consider two-person bargaining problems in which mechanism is selected at the almost ex ante stage-when there is some positive probability that players may have learned their private types-and the chosen mechanism is implemented at the interim stage. For these problems, I define almost ex ante incentive efficient mechanisms and apply the concept of neutral optima (Myerson 1984b). I show that those mechanisms may not be ex ante incentive efficient. This note suggests that ex ante incentive efficient mechanisms are not robust to a perturbation of the ex ante informational structure at the time of mechanism selection.

Suggested Citation

  • Jin Yeub Kim, 2020. "Efficient and Neutral Mechanisms in Almost Ex Ante Bargaining Problems," Working papers 2020rwp-174, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2020rwp-174
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bargaining; Incomplete information; Mechanism selection; Almost ex ante stage; Incentive efficiency; Neutral optima;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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