Incentive Compatibility and the Bargaining ... - Semantic Scholar

Bayesian Collective Choice Problem

Incentive Compatibility and the Bargaining Problem By Roger Myerson

Assumptions

Bayesian Incentive Compatibility

1

Response Plan Equilibrium

Incentive Efficiency

There can be more than one incentive efficient mechanism.

Among incentive compatible mechanisms we look for those, which optimize the payoff vector.

Which to choose? Such mechanisms are said to be incentive efficient

Bargaining Solution

Example 90% $ 90

Project $ 100

Player A(1)

10%

$ 30

$ 90

Player B

Player A(2)

Arbitrator

2

Example 90%

90%

$ 90

Project $ 100

Player A(1)

10%

Example

Player B

Player B

B should pay

Solution

$ 90

Project $ 100

Player A(1)

Player A(2)

$ 30

$ 90

Arbitrator

Example

10%

10% Player A(2)

A should pay

Arbitrator

90%

Project $ 100

Player A(1)

$ 30

Player A(2)

$ 90

$ 90

$ 30

$ 90

Player B

Cancel Project

Arbitrator

Solution

References

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