On Private Communication in Competing Mechanism Games

22 Pages Posted: 16 Dec 2017

See all articles by Andrea Attar

Andrea Attar

Toulouse School of Economics; University of Roma Tor Vergata

Eloisa Campioni

University of Rome Tor Vergata - Dept. of Economics and Finance

Gwenael Piaser

IPAG Business School

Date Written: December 15, 2017

Abstract

We study competing mechanism games in which principals simultaneously design contracts to deal with several agents. We show that principals can profit from privately communicating with agents by generating incomplete information in the continuation game they play. Specifically, we construct an example of a complete information game in which none of the (multiple) equilibria in Yamashita (2010) survives against unilateral deviations to mechanisms involving private communication. This also contrasts with the robustness result established by Han (2007). The role of private communication we document may call for extending the standard construction of Epstein and Peters (1999) to incorporate this additional element.

Suggested Citation

Attar, Andrea and Campioni, Eloisa and Piaser, Gwenaël, On Private Communication in Competing Mechanism Games (December 15, 2017). CEIS Working Paper No. 421. Available at SSRN: https://ssrn.com/abstract=3088701 or http://dx.doi.org/10.2139/ssrn.3088701

Andrea Attar (Contact Author)

Toulouse School of Economics

21, allée de Brienne
Toulouse, F 31000
France
+33 5 61128578 (Phone)

University of Roma Tor Vergata ( email )

2 Via Columbia
00100 Rome
Italy

Eloisa Campioni

University of Rome Tor Vergata - Dept. of Economics and Finance ( email )

Italy

Gwenaël Piaser

IPAG Business School ( email )

184 BD Saint Germain
Paris, 75006
France

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