Mechanism Design with Aftermarkets: On the Impossibility of Pure Information Intermediation
12 Pages Posted: 3 Jan 2017
Date Written: December 31, 2016
A mediator, with no prior information and no control over the market protocol, attempts to redesign the information structure in the market by running an information intermediation mechanism with transfers that first elicits information from an agent, and then discloses information to another market participant (third party). The note establishes a general impossibility result: If the third party has full bargaining power in the interaction with the agent, all incentive-compatible information intermediation mechanisms are uninformative about the agent's type.
Keywords: Mechanism Design, Information Design, Sequential Agency, Communication
JEL Classification: D47, D82, D83
Suggested Citation: Suggested Citation