Efficient and Neutral Mechanisms in Almost Ex Ante Bargaining Problems

36 Pages Posted: 10 Mar 2017 Last revised: 16 Jun 2020

See all articles by Jin Yeub Kim

Jin Yeub Kim

Yonsei University - School of Economics

Date Written: May 29, 2018

Abstract

I consider two-person bargaining problems in which mechanism is selected at the almost ex ante stage---when there is some positive probability that players may have learned their private types---and the chosen mechanism is implemented at the interim stage. For these problems, I define almost ex ante incentive efficient mechanisms and apply the concept of neutral optima (Myerson 1984). I show that those mechanisms may not be ex ante incentive efficient. This note suggests that ex ante incentive efficient mechanisms are not robust to a perturbation of the ex ante informational structure at the time of mechanism selection.

Keywords: Bargaining, incomplete information, mechanism selection, almost ex ante stage, incentive efficiency, neutral optima

JEL Classification: C71, C78, D74, D82

Suggested Citation

Kim, Jin Yeub, Efficient and Neutral Mechanisms in Almost Ex Ante Bargaining Problems (May 29, 2018). Available at SSRN: https://ssrn.com/abstract=2930907 or http://dx.doi.org/10.2139/ssrn.2930907

Jin Yeub Kim (Contact Author)

Yonsei University - School of Economics ( email )

Seoul
Korea, Republic of (South Korea)

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