Mechanism Design with Weaker Incentive Compatibility Constraints

We study an adverse selection problem, where an agent is able to understate his productivity, but not allowed to overstate it. The solution to this problem is generally different than the solution to the standard problem, where no restriction is made on the statements of the agent. We identify a sufficient condition, that does not depend on the distribution of types, under which these two solutions coincide.Mechanism Design, Incentive Compatibility

Counter Marginalization of Information Rents under Collusion

I study a multi-player mechanism design problem where the players are able to collude. I characterize the extent that the principal can link the compensation level of one of these players to the production performance of the other. I use this characterization result to identify the optimal contract for a principal with budget constraints.Collusion, Mechanism design

On compactness of the dbar-Neumann problem and Hankel operators

Let \D=\D_1\setminus \Dc_2, where \D_1 and \D_2 are two smooth bounded pseudoconvex domains in \C^n, n\geq 3, such that \Dc_2\subset \D_1. Assume that the \dbar-Neumann operator of \D_1 is compact and the interior of the Levi-flat points in the boundary of \D_2 is not empty (in the relative topology). Then we show that the Hankel operator on \D with symbol \phi, H^{\D}_{\phi}, is compact for every \phi\in C(\Dc) but the \dbar-Neumann operator on \D is not compact.Comment: 8 pages, to appear in Proc. Amer. Math. So

Veto players and equilibrium uniqueness in the Baron-Ferejohn model

In political economy, the seminal contribution of the Baron–Ferejohn bargaining model constitutes an important milestone for the study of legislative policy making. In this paper, we analyze a particular equilibrium characteristic of this model, equilibrium uniqueness. The Baron–Ferejohn model yields a class of payoff-unique stationary subgame perfect equilibria (SSPE) in which players’ equilibrium strategies are not uniquely determined. We first provide a formal proof of the multiplicity of equilibrium strategies. This also enables us to establish some important properties of SSPE. We then introduce veto players into the original Baron–Ferejohn model. We state the conditions under which the new model has a unique SSPE not only in terms of payoffs but also in terms of players’ equilibrium strategies