Ex post renegotiation-proof mechanism design

We study what kind of equilibria of which mechanisms are ex post renegotiation-proof (EPRP), i.e., robust against the possibility of ex post renegotiation under a variety of renegotiation procedures, and which social choice functions are EPRP implementable. In complete information environments with...

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Bibliographic Details
Published in:Journal of economic theory 2013-03, Vol.148 (2), p.473-501
Main Authors: Neeman, Zvika, Pavlov, Gregory
Format: Article
Language:English
Subjects:
Agency theory
Allocations
Balancing
Budgeting
Correlation
Decision analysis
Economic theory
Economics
Ex post renegotiation
Implementation
Mechanism design
Renegotiation
Resource allocation
Studies
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Summary:We study what kind of equilibria of which mechanisms are ex post renegotiation-proof (EPRP), i.e., robust against the possibility of ex post renegotiation under a variety of renegotiation procedures, and which social choice functions are EPRP implementable. In complete information environments with two agents only budget balanced Groves allocations are EPRP implementable, while with three or more agents – all ex post efficient allocations are. In environments with independent private values essentially only the budget balanced “Groves in expectations” allocations are EPRP implementable, while with three or more agents and correlated beliefs – all ex post efficient allocations are.
ISSN:0022-0531
1095-7235
DOI:10.1016/j.jet.2012.08.003