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The efficiency of competitive mechanisms under private information
| Content Provider | Semantic Scholar |
|---|---|
| Author | Al-Najjara, Nabil I. Smorodinskyb, Rann |
| Copyright Year | 2007 |
| Abstract | We consider the efficiency properties of exchange economies where privately informed traders behave strategically. Specifically, a competitive mechanism is any mapping of traders’ reports about their types to an equilibrium price vector and allocation of the reported economy. In our model, some traders may have non-vanishing impact on prices and allocations regardless of the size of the economy. Although truthful reporting by all traders cannot be achieved, we show that, given any desired level of approximation, there is N̄ such that any Bayesian–Nash equilibrium of any competitive mechanism of any private information economy with N̄ or more traders leads, with high probability, to prices and allocations that are close to a competitive equilibrium of the true economy. In particular, allocations are approximately efficient. A key assumption is that there is small probability that traders behave non-strategically. © 2007 Elsevier Inc. All rights reserved. JEL classification: D61; D82 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.kellogg.northwestern.edu/faculty/alnajjar/papers/Efficiency_of%20Competitive%20Meachanisms%20under%20Private.pdf |
| Language | English |
| Access Restriction | Open |
| Subject Keyword | Allocation Approximation Kind of quantity - Equilibrium Nash equilibrium Personally identifiable information Traders Universal quantification With high probability |
| Content Type | Text |
| Resource Type | Article |
