Switching from complete to incomplete information

Olivier Bochet

    Research output: Contribution to journalArticle

    Abstract

    We construct an elementary mechanism [Dutta, B., Sen, A., Vohra, R., 1995. Nash implementation through elementary mechanisms in economic environments. Review of Economic Design 1, 173-203] that Nash implements the constrained Walrasian correspondence. We extend it to incomplete and non-exclusive information economies by enlarging the message space of agents. In addition, measurability restrictions on allocations with respect to prices proper to constrained rational expectations equilibria are imposed in the outcome function. We show that by imposing such restrictions, the mechanism Bayesian implements the constrained rational expectations equilibrium correspondence. This result shows game-theoretic connections between these two market equilibrium concepts. However, these connections are obtained at the price of strong restrictions on the behavior of agents.

    Original languageEnglish (US)
    Pages (from-to)735-748
    Number of pages14
    JournalJournal of Mathematical Economics
    Volume43
    Issue number6
    DOIs
    StatePublished - Aug 1 2007

    Fingerprint

    Incomplete Information
    Rational Expectations
    Restriction
    Economics
    Correspondence
    Economic Design
    Market Equilibrium
    Measurability
    Game
    Incomplete information
    Rational expectations equilibrium

    Keywords

    • Elementary mechanism
    • Implementation
    • Rational expectations equilibrium
    • Walrasian equilibrium

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Applied Mathematics

    Cite this

    Switching from complete to incomplete information. / Bochet, Olivier.

    In: Journal of Mathematical Economics, Vol. 43, No. 6, 01.08.2007, p. 735-748.

    Research output: Contribution to journalArticle

    Bochet, Olivier. / Switching from complete to incomplete information. In: Journal of Mathematical Economics. 2007 ; Vol. 43, No. 6. pp. 735-748.
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