Doval, Laura;
Skreta, Vasiliki;
(2022)
Mechanism Design With Limited Commitment.
ECONOMETRICA
, 90
(4)
pp. 1463-1500.
10.3982/ECTA16846.
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Abstract
We develop a tool akin to the revelation principle for dynamic mechanism-selection games in which the designer can only commit to short-term mechanisms. We identify a canonical class of mechanisms rich enough to replicate the outcomes of any equilibrium in a mechanism-selection game between an uninformed designer and a privately informed agent. A cornerstone of our methodology is the idea that a mechanism should encode not only the rules that determine the allocation, but also the information the designer obtains from the interaction with the agent. Therefore, how much the designer learns, which is the key tension in design with limited commitment, becomes an explicit part of the design. Our result simplifies the search for the designer-optimal outcome by reducing the agent's behavior to a series of participation, truth telling, and Bayes' plausibility constraints the mechanisms must satisfy.
| Type: | Article |
|---|---|
| Title: | Mechanism Design With Limited Commitment |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.3982/ECTA16846 |
| Publisher version: | https://doi.org/10.3982/ECTA16846 |
| Language: | English |
| Additional information: | © 2022 The Authors. Econometrica published by John Wiley & Sons Ltd on behalf of The Econometric Society. Laura Doval is the corresponding author on this paper. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. |
| Keywords: | Social Sciences, Science & Technology, Physical Sciences, Economics, Mathematics, Interdisciplinary Applications, Social Sciences, Mathematical Methods, Statistics & Probability, Business & Economics, Mathematics, Mathematical Methods In Social Sciences, Mechanism design, limited commitment, revelation principle, information design, short-term mechanisms, IMPERFECT COMMITMENT, AUCTION DESIGN, INFORMATION, THEOREMS |
| UCL classification: | UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics UCL > Provost and Vice Provost Offices > UCL SLASH UCL |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10154019 |
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