Efficient allocations in economies with asymmetric information when the realized frequency of types is common knowledge

TY - JOUR

T1 - Efficient allocations in economies with asymmetric information when the realized frequency of types is common knowledge

AU - Koufopoulos, Konstantinos

AU - Boukouras, Aristotelis

N1 - © The Author(s) 2016

PY - 2017/6

Y1 - 2017/6

N2 - We consider a general economy, where agents have private information about their types. Types can be multidimensional and potentially interdependent. We show that, if the realized frequency of types (the exact number of agents for each type) is common knowledge, then a mechanism exists, which is consistent with truthful revelation of private information and which implements first-best allocations of resources as the unique equilibrium. The result requires the single-crossing property on utility functions and the anonymity of the Pareto correspondence.

AB - We consider a general economy, where agents have private information about their types. Types can be multidimensional and potentially interdependent. We show that, if the realized frequency of types (the exact number of agents for each type) is common knowledge, then a mechanism exists, which is consistent with truthful revelation of private information and which implements first-best allocations of resources as the unique equilibrium. The result requires the single-crossing property on utility functions and the anonymity of the Pareto correspondence.

KW - Adverse selection

KW - First-best

KW - Full implementation

KW - Mechanism design

KW - Single-crossing property

UR - http://www.scopus.com/inward/record.url?scp=84978924799&partnerID=8YFLogxK

U2 - 10.1007/s00199-016-0993-0

DO - 10.1007/s00199-016-0993-0

M3 - Article

SN - 0938-2259

VL - 64

SP - 75

EP - 98

JO - Economic theory

JF - Economic theory

IS - 1

ER -