A Note on Budget Balance Under Interim Participation Constraints: The Case of Independent Types

MPI Collective Goods Preprint No. 2005/14

Microeconomic Theory in Canada Paper No. 05-02-08-08-39-42

18 Pages Posted: 4 May 2005

See all articles by Tilman Borgers

Tilman Borgers

University College London - Department of Economics

Peter Norman

University of British Columbia - Department of Economics

Abstract

We provide a simple proof of the equivalence between ex ante and ex post budget balance constraints in Bayesian mechanism design with independent types when participation decisions are made at the interim stage. The result is given an interpretation in terms of efficient allocation of risk.

Keywords: ex ante budget balance, ex post budget balance

JEL Classification: D79, D82

Suggested Citation

Borgers, Tilman and Norman, Peter, A Note on Budget Balance Under Interim Participation Constraints: The Case of Independent Types. MPI Collective Goods Preprint No. 2005/14, Microeconomic Theory in Canada Paper No. 05-02-08-08-39-42, Available at SSRN: https://ssrn.com/abstract=713043 or http://dx.doi.org/10.2139/ssrn.713043

Tilman Borgers (Contact Author)

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Peter Norman

University of British Columbia - Department of Economics ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z2
Canada
(604) 822-2839 (Phone)

HOME PAGE: http://faculty.arts.ubc.ca/pnorman/

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