Journal article
Implementation under ambiguity
Games and economic behavior, Vol.101, pp.20-33
01/2017
DOI: 10.1016/j.geb.2015.10.010
Abstract
We introduce the idea of implementation under ambiguity. In particular, we study maximin efficient notions for an ambiguous asymmetric information economy (i.e., economies where agents' preferences are maximin à laWald, 1950). The interest on the maximin preferences lies in the fact that maximin efficient allocations are always incentive compatible (de Castro and Yannelis, 2009), a result which is false with Bayesian preferences. A noncooperative notion called maximin equilibrium is introduced which provides a noncooperative foundation for individually rational and maximin efficient notions. Specifically, we show that given any arbitrary individually rational and ex-ante maximin efficient allocation, there is a direct revelation mechanism that yields the efficient allocation as its unique maximin equilibrium outcome. Thus, an incentive compatible, individually rational and efficient outcome can be reached by means of noncooperative behavior under ambiguity.
Details
- Title: Subtitle
- Implementation under ambiguity
- Creators
- Luciano I. de Castro - University of IowaZhiwei Liu - Capital University of Economics and BusinessNicholas C. Yannelis - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Games and economic behavior, Vol.101, pp.20-33
- DOI
- 10.1016/j.geb.2015.10.010
- ISSN
- 0899-8256
- eISSN
- 1090-2473
- Publisher
- Elsevier Inc
- Grant note
- Research and Innovation Centre of Metropolis Economic and Social Development, Capital University of Economics and Business
- Language
- English
- Date published
- 01/2017
- Academic Unit
- Economics
- Record Identifier
- 9984380393002771
Metrics
6 Record Views