On Competing Mechanisms under Exclusive Competition

Abstract

We study games in which several principals design incentive schemes in the presence of privately informed agents. Competition is exclusive: each agent can participate with at most one principal, and principal-agents corporations are isolated. We analyze the role of standard incentive compatible mechanisms in these contexts. First, we provide a clarifying example showing how incentive compatible mechanisms fail to completely characterize equilibrium outcomes even if we restrict to pure strategy equilibria. Second, we show that truth-telling equilibria are robust against unilateral deviations toward arbitrary mechanisms. We then consider the single agent case and exhibit sufficient conditions for the validity of the revelation principle.

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Replaced by

Andrea Attar, Eloisa Campioni, and Gwenaël Piaser, “On Competing Mechanisms under Exclusive Competition”, Games and Economic Behavior, vol. 111, September 2018, pp. 1–15.

Reference

Andrea Attar, Eloisa Campioni, and Gwenaël Piaser, “On Competing Mechanisms under Exclusive Competition”, TSE Working Paper, n. 15-609, November 2015.