On Competing Mechanisms Under Exclusive Competition

36 Pages Posted: 28 Aug 2018

See all articles by Andrea Attar

Andrea Attar

Toulouse School of Economics; University of Roma Tor Vergata

Eloisa Campioni

University of Rome Tor Vergata - Dept. of Economics and Finance

Gwenael Piaser

IPAG Business School

Date Written: June 22, 2018

Abstract

We study games in which several principals design mechanisms in the presence of privately informed agents. Competition is exclusive: each type of each agent can participate with at most one principal and meaningfully communicate only with him. Economic models of exclusive competition restrict principals to use standard direct mechanisms, which induce truthful revelation of agents’ exogenous private information. This paper investigates the rationale for this restriction. We provide two results. First, we construct examples showing that direct mechanisms fail to completely characterize equilibrium outcomes even if we restrict to pure strategy equilibria. Second, we show that truth-telling strongly robust equilibrium outcomes survive against principals’ unilateral deviations toward arbitrary mechanisms.

Keywords: Competing Mechanisms, Exclusive Competition, Incomplete Information

JEL Classification: D82

Suggested Citation

Attar, Andrea and Campioni, Eloisa and Piaser, Gwenaël, On Competing Mechanisms Under Exclusive Competition (June 22, 2018). CEIS Working Paper No. 441, Available at SSRN: https://ssrn.com/abstract=3229222 or http://dx.doi.org/10.2139/ssrn.3229222

Andrea Attar

Toulouse School of Economics

21, allée de Brienne
Toulouse, F 31000
France
+33 5 61128578 (Phone)

University of Roma Tor Vergata ( email )

2 Via Columbia
00100 Rome
Italy

Eloisa Campioni (Contact Author)

University of Rome Tor Vergata - Dept. of Economics and Finance ( email )

Italy

Gwenaël Piaser

IPAG Business School ( email )

184 BD Saint Germain
Paris, 75006
France

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