Journal article
Persuasion in an asymmetric information economy: a justification of Wald’s maxmin preferences
Economic theory, Vol.72(3), pp.801-833
10/01/2021
DOI: 10.1007/s00199-021-01364-7
Abstract
To justify the use of Wald’s maxmin preferences in an asymmetric information economy, we introduce a mechanism designer who can convince/persuade agents to adopt Wald’s maxmin preferences. We show that more efficient and individually rational allocations become incentive compatible if the mechanism designer persuades agents to use Wald’s maxmin preferences instead of Bayesian preferences. Thus, we justify the Wald’s maxmin preferences by showing that agents can be persuaded to use them in order to enlarge the set of efficient, individually rational and incentive compatible allocations.
Details
- Title: Subtitle
- Persuasion in an asymmetric information economy: a justification of Wald’s maxmin preferences
- Creators
- Zhiwei Liu - Capital University of Economics and BusinessNicholas C. Yannelis - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Economic theory, Vol.72(3), pp.801-833
- Publisher
- Springer Berlin Heidelberg
- DOI
- 10.1007/s00199-021-01364-7
- ISSN
- 0938-2259
- eISSN
- 1432-0479
- Grant note
- 71703110 / National Natural Science Foundation of China (http://dx.doi.org/10.13039/501100001809)
- Language
- English
- Date published
- 10/01/2021
- Academic Unit
- Economics
- Record Identifier
- 9984380555202771
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