Sellers with Misspecified Models

• 成果类型: Article
• 署名作者: Madarasz, Kristof; Prat, Andrea
• 署名单位: University of London; London School Economics & Political Science; Columbia University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdw030
• 发表日期: 2017
• 页码: 790-815
• 关键词: Mechanism design; implementation; COMMUNICATION; CONTRACTS; monopoly

摘要

Principals often operate on misspecified models of their agents' preferences. When preferences are such that non-local incentive constraints may bind in the optimum, even slight misspecification of the preferences can lead to large and non-vanishing losses. Instead, we propose a two-step scheme whereby the principal: (1) identifies the model-optimal menu; and (2) modifies prices by offering to share with the agent a fixed proportion of the profit she would receive if an item were sold at the model-optimal price. We show that her loss is bounded and vanishes smoothly as the model converges to the truth. Finally, two-step mechanisms without a sharing rule like (2) will not yield a valid approximation.