In an example, monetary policy can determine the information revealed by prices, and thus it can be effective. Monetary policy that varies only with public information can guarantee the full revelation of information at equilibrium, which is optimal. Full indexation need not attain full revelation and, as a consequence, need not implement an optimal allocation. Journal of Economic Literature Cl...

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 sav...

Geographically dispersed sellers in electronic reverse-marketplaces such as those hosted by Freemarkets are uncertain about the number of competitors they face in any given market-session. Over the course of several market-sessions they learn about the competitive nature of the marketplace. How sellers learn to reduce the market-structure uncertainty depends on the market-transparency scheme, o...