Attar, Andrea, Campioni, Eloisa, Mariotti, Thomas and Piaser, Gwenaël (2019) Competing mechanisms and folk fheorems: two examples. TSE Working Paper, n. 19-1014, Toulouse

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Abstract

We study competing-mechanism games under exclusive competition: principals first simultaneously post mechanisms, after which agents simultaneously choose to
participate and communicate with at most one principal. In this setting, which is common to competing-auction and competitive-search applications, we develop two
complete-information examples that question the relevance of the folk theorems for competing-mechanism games documented in the literature. The first example shows that there can exist pure-strategy equilibria in which some principal obtains a payoff below her min-max payoff, computed over all principals' decisions. Thus folk-theoremlike results may have to involve a bound on principals' payoffs that depends on the spaces of messages available to the agents, and not only on the players' actions. The second example shows that even this nonintrinsic approach is misleading when agents'
participation decisions are strategic: there can exist incentive-feasible allocations in which principals obtain payoffs above their min-max payoffs, computed over arbitrary
spaces of mechanisms, but which cannot be supported in equilibrium.

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• Competing mechanisms and folk fheorems: two examples. (deposited 05 Jun 2019 07:43) [Currently Displayed]
  • Competing mechanisms and folk theorems: two examples. (deposited 26 Nov 2020 15:21)