From equals to despots: The dynamics of repeated decision making in partnerships with private information

• 成果类型: Article
• 署名作者: Carrasco, Vinicius; Fuchs, William; Fukuda, Satoshi
• 署名单位: University of Texas System; University of Texas Austin; Universidad Carlos III de Madrid; Bocconi University; Bocconi University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2019.03.007
• 发表日期: 2019
• 页码: 402-432
• 关键词: Repeated collective decision making; Dictatorial mechanism; Dynamic Bayesian mechanism design; renegotiation-proofness; regime shifts

摘要

This paper considers an optimal renegotiation-proof dynamic Bayesian mechanism in which two privately informed players repeatedly have to take a joint action without resorting to side-payments. We provide a general framework which accommodates as special cases committee decision and collective insurance problems. Thus, we formally connect these separate strands of literature. We show: (i) first-best values can be arbitrarily approximated (but not achieved) when the players are sufficiently patient; (ii) our main result, the provision of intertemporal incentives necessarily leads to a dictatorial mechanism: in the long run the optimal scheme converges to the adoption of one player's favorite action. This can entail one agent becoming a permanent dictator or a possibility of having sporadic regime shifts. (C) 2019 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).