IDEAS home Printed from https://ideas.repec.org/p/yon/wpaper/2020rwp-174.html
   My bibliography  Save this paper

Efficient and Neutral Mechanisms in Almost Ex Ante Bargaining Problems

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://121.254.254.220/repec/yon/wpaper/2020rwp-174.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andrew Kydd, 2003. "Which Side Are You On? Bias, Credibility, and Mediation," American Journal of Political Science, John Wiley & Sons, vol. 47(4), pages 597-611, October.
    2. John O. Ledyard & Thomas R. Palfrey, 1994. "Voting and Lottery Drafts as Efficient Public Goods Mechanisms," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(2), pages 327-355.
    3. Maskin, Eric & Tirole, Jean, 1992. "The Principal-Agent Relationship with an Informed Principal, II: Common Values," Econometrica, Econometric Society, vol. 60(1), pages 1-42, January.
    4. Celik, Gorkem & Peters, Michael, 2011. "Equilibrium rejection of a mechanism," Games and Economic Behavior, Elsevier, vol. 73(2), pages 375-387.
    5. Balkenborg, Dieter & Makris, Miltiadis, 2015. "An undominated mechanism for a class of informed principal problems with common values," Journal of Economic Theory, Elsevier, vol. 157(C), pages 918-958.
    6. Maskin, Eric & Tirole, Jean, 1990. "The Principal-Agent Relationship with an Informed Principal: The Case of Private Values," Econometrica, Econometric Society, vol. 58(2), pages 379-409, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jin Yeub Kim, 2022. "Neutral public good mechanisms," PLOS ONE, Public Library of Science, vol. 17(4), pages 1-16, April.
    2. Jin Yeub Kim, 2019. "Neutral Public Good Mechanisms," Working papers 2019rwp-159, Yonsei University, Yonsei Economics Research Institute.
    3. Kim, Jin Yeub, 2017. "Interim third-party selection in bargaining," Games and Economic Behavior, Elsevier, vol. 102(C), pages 645-665.
    4. Jin Yeub Kim, 2021. "A Unique and Robust Social Contract: An Application to Negotiations with Probabilistic Conflicts," Working papers 2021rwp-187, Yonsei University, Yonsei Economics Research Institute.
    5. Koessler, Frédéric & Skreta, Vasiliki, 2016. "Informed seller with taste heterogeneity," Journal of Economic Theory, Elsevier, vol. 165(C), pages 456-471.
    6. Takeshi Nishimura, 2019. "Informed Principal Problems in Bilateral Trading," Papers 1906.10311, arXiv.org, revised Feb 2022.
    7. Gorkem Celik & Michael Peters, 2016. "Reciprocal relationships and mechanism design," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(1), pages 374-411, February.
    8. Anastasios Dosis, 2022. "On the informed principal model with common values," RAND Journal of Economics, RAND Corporation, vol. 53(4), pages 792-825, December.
    9. Koessler, Frederic & Skreta, Vasiliki, 2019. "Selling with evidence," Theoretical Economics, Econometric Society, vol. 14(2), May.
    10. Mylovanov, Timofiy & Troger, Thomas E., 2012. "Informed principal problems in generalized private values environments," Theoretical Economics, Econometric Society, vol. 7(3), September.
    11. Nishimura, Takeshi, 2022. "Informed principal problems in bilateral trading," Journal of Economic Theory, Elsevier, vol. 204(C).
    12. Xin Zhao, 2023. "Auction design by an informed seller: A foundation of reserve price signalling," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 1161-1190, August.
    13. Vasconcelos, Luís, 2017. "A signaling-based theory of contractual commitment to relationships," European Economic Review, Elsevier, vol. 93(C), pages 123-138.
    14. Frances Xu Lee & Yuk‐fai Fong, 2017. "Signaling by an informed service provider," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 955-968, December.
    15. Charles Z. Zheng, 2016. "Goethe's secret reserve price," International Journal of Economic Theory, The International Society for Economic Theory, vol. 12(1), pages 41-48, March.
    16. Marcelo Bianconi, 2004. "Aggregate and Idiosyncratic Risk and the Behavior of Individual Preferences under Moral Hazard," Discussion Papers Series, Department of Economics, Tufts University 0410, Department of Economics, Tufts University.
    17. Schumacher, Heiner & Thysen, Heidi Christina, 2022. "Equilibrium contracts and boundedly rational expectations," Theoretical Economics, Econometric Society, vol. 17(1), January.
    18. Feess Eberhard & Walzl Markus & Schieble Michael, 2011. "Why it Pays to Conceal: On the Optimal Timing of Acquiring Verifiable Information," German Economic Review, De Gruyter, vol. 12(1), pages 100-123, February.
    19. Vasconcelos, Luís, 2014. "Contractual signaling, relationship-specific investment and exclusive agreements," Games and Economic Behavior, Elsevier, vol. 87(C), pages 19-33.
    20. Watson, Joel, 2002. "Starting Small and Commitment," Games and Economic Behavior, Elsevier, vol. 38(1), pages 176-199, January.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:yon:wpaper:2020rwp-174. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: YERI (email available below). General contact details of provider: https://edirc.repec.org/data/eryonkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.