Econometrica: Nov 2005, Volume 73, Issue 6
Robust Mechanism Design
Dirk Bergemann, Stephen Morris
The mechanism design literature assumes too much common knowledge of the environment among the players and planner. We relax this assumption by studying mechanism design on richer type spaces.
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Supplementary Material to "Robust Mechanism Design"In this appendix to ?Robust Mechanism Design? we provide a set of sufficient conditions which encompass the quasilinear environment. With these conditions, we can generalize the equivalence results presented in Proposition 4 for common prior full support payoff type spaces. The first condition replaces the compactness condition, the second and third conditions generalize the important features of the quasilinear utility model. The appendix ends with an example which is meant to illustrate that the conditions, in particular, the condition on bounded allocation differences, is not easily dispensed with.