The strategically ignorant principal

Bedard, Nicholas C.

doi:10.1016/j.geb.2017.02.010

Cited by 7 publications

(2 citation statements)

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“…They show that the assured allocation weakly dominates the RSW mechanism, but coincides with it when the RSW mechanism is undominated. In the general setting studied by Maskin and Tirole (1992), Bedard (2017) shows that under some general conditions, the principal strictly prefers to be not fully informed. Severinov (2008), different from the papers above, considers an environment with multiple agents.…”

Section: Zhaomentioning

confidence: 99%

Auction design by an informed seller: A foundation of reserve price signalling

Zhao

2023

Canadian J of Economics

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This paper studies mechanism design by a seller privately informed of the (continuous) quality of an indivisible object. An important solution to this informed‐principal problem, the Rothschild–Stiglitz–Wilson mechanisms, which correspond to the least‐cost separating allocations in the signalling literature, is characterized. The characterization reveals that reserve prices are the least costly device to separate sellers of different qualities: In the RSW mechanisms, the lowest‐quality seller adopts her public‐information optimal selling procedure, and each higher‐quality seller adopts a selling procedure that differs from her public‐information optimal one only in that the reserve prices are higher. This finding provides a mechanism‐design foundation for reserve‐price signalling studied in the literature.

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Section: Zhaomentioning

confidence: 99%

Auction design by an informed seller: A foundation of reserve price signalling

Zhao

2023

Canadian J of Economics

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“…Cella (2008) considers a correlated private-value environment with an informed agent and shows that the principal benefits from the privacy of her information in an equilibrium. Bedard (2017) finds the principal's benefit from her privacy in a common-value environment with an uninformed agent, and presents the principal's optimal information structure. In a common-value environment with an uninformed agent, Balkenborg and Makris (2015) introduce the concept of "assured mechanism" and show that the mechanism is a neutral optimum under certain conditions.…”

Section: Figure 1: Relations Among the Refinement Conceptsmentioning

confidence: 99%

Informed Principal Problems in Bilateral Trading

Nishimura¹

2019

Preprint

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We study informed principal problems in a bilateral trade environment where a seller and a buyer have private information about independent types affecting their interdependent valuations. The seller has full bargaining power to offer a mechanism. We prove both the existence of a D1 equilibrium and the uniqueness of the equilibrium interim payoff vector for the seller. The uniqueness result holds even if the refinement concept is weakened to the intuitive criterion under certain regularity conditions. The refined equilibrium payoff vectors for both players are characterized by the seller's best incentive-feasible allocation among those that are ex post incentive compatible and individually rational for the buyer. The allocation takes a simple format of (almost-)fixed prices if the virtual surplus is strictly increasing in the buyer's type. We show that the privacy of the seller's information causes undersupply of the good and reduces both players' interim payoffs.

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The Bayesian approach to monopoly regulation after 40 years

Saglam

2024

J Regul Econ

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The strategically ignorant principal

Cited by 7 publications

References 20 publications

Auction design by an informed seller: A foundation of reserve price signalling

Auction design by an informed seller: A foundation of reserve price signalling

Informed Principal Problems in Bilateral Trading

The Bayesian approach to monopoly regulation after 40 years

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