Mechanism Design with Aftermarkets: On the Impossibility of Pure Information Intermediation

12 Pages Posted: 3 Jan 2017  

Piotr Dworczak

Stanford University, Graduate School of Business

Date Written: December 31, 2016

Abstract

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

Dworczak, Piotr, Mechanism Design with Aftermarkets: On the Impossibility of Pure Information Intermediation (December 31, 2016). Stanford University Graduate School of Business Research Paper No. 17-3. Available at SSRN: https://ssrn.com/abstract=2892085

Piotr Dworczak (Contact Author)

Stanford University, Graduate School of Business ( email )

Stanford, CA
United States

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