Notes on the Revelation Principle
نویسنده
چکیده
This set of lecture notes covers a general model of adverse selection as well as a leading example that of a price discriminating monopolist due to Maskin and Riley (1984). At the end of this unit, students should understand the application of the revelation principal to this class of models, the general solution techniques, and the key economic trade-o¤ e¢ ciency versus information rent savings.
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The revelation principle and regularity conditions
The revelation principle asserts that every outcome brought by a mechanism is realized by a truthful direct mechanism. The present paper investigates the regularity conditions of these two mechanisms in the continuous space of the agent’s type. It questions what regularity condition a general mechanism confers upon a direct mechanism through the revelation principle. By so doing, we elucidate t...
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