Uncertainty, efficiency and incentive compatibility: Ambiguity solves the conflict between efficiency and incentive compatibility

• 成果类型: Article
• 署名作者: De Castro, Luciano; Yannelis, Nicholas C.
• 署名单位: University of Iowa; University of Iowa
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2018.02.008
• 发表日期: 2018
• 页码: 678-707
• 关键词: Asymmetric information; ambiguity aversion; incentive compatibility; mechanism design; First-best; second-best

摘要

A fundamental result of modern economics is the conflict between efficiency and incentive compatibility, that is, the fact that some Pareto optimal (efficient) allocations are not incentive compatible. This conflict has generated a huge literature, which almost always assumes that individuals are expected utility maximizers. What happens if they have other kind of preferences? Is there any preference where this conflict does not exist? Can we characterize those preferences? We show that in an economy where individuals have complete, transitive, continuous and monotonic preferences, every efficient allocation is incentive compatible if and only if individuals have maximin preferences. (C) 2018 Elsevier Inc. All rights reserved.