CARESS Working Paper # 99 - 14 Informational Size and Incentive Compatibility
نویسندگان
چکیده
We examine a general equilibrium model with asymetrically informed agents. The presence of asymmetric information generally presents a con°ict between incentive compatibility and Pareto e±ciency. We present a notion of informational size and show that the con°ict between incentive compatibility and e±ciency can be made arbitrarily small if agents are su±ciently small informationally .
منابع مشابه
INFORMATIONAL SIZE AND INCENTIVE COMPATIBILITY By Richard
We examine a general equilibrium model with asymmetrically informed agents. The presence of asymmetric information generally presents a conflict between incentive compatibility and Pareto efficiency. We present a notion of informational size and show that the conflict between incentive compatibility and efficiency can be made arbitrarily small if agents are of sufficiently small informational s...
متن کاملInformational size and incentive compatibility with aggregate uncertainty
In McLean and Postlewaite (Econometrica 56, 1992, p. 2421), we analyzed pure exchange economies with asymmetrically informed agents. We defined a notion of informational size and showed that, when the aggregate information of all agents resolves nearly all the uncertainty regarding the state of nature, the conflict between incentive compatibility and (ex post) efficiency can be made small if ag...
متن کاملCARESS Working Paper #95-04 Justifying Rational Expectations
In a static economy with symmetric information, the informational requirements for competitive equilibrium are very weak: markets clear and each agent is rational. With asymmetric information, the solution concept of competitive equilibrium has been generalized to rational expectations equilibrium. But now common knowledge of market clearing and rationality is required. This paper proves versio...
متن کاملInformational size, incentive compatibility, and the core of a game with incomplete information
We study the ex ante incentive compatible core, and provide conditions under which the ex ante incentive compatible core is nonempty when agents are informationally small in the sense of McLean and Postlewaite (2002a, Econometrica, 70, 2421–2453). 2003 Elsevier Inc. All rights reserved. JEL classification: C71; D51; D82
متن کاملCARESS Working Paper 97-09 Cooperation, Corporate Culture and Incentive Intensity
We develop a theory of the ...rm in which the willingness of workers to cooperate with each other plays a central role. We study a dynamic principal-agent problem. In each period, the ...rm (the principal) chooses an incentive intensity (how much to pay workers per-unit of measured output) and the employees (the agents) allocate e¤ort between individual production and tasks that involve coopera...
متن کامل