Decision Sciences
4 years ago

Mechanism Designers Can Extract Full Surplus, Incentivizing Information Acquisition

Journal of Economic Theory
Information acquisition and full surplus extraction
Sushil Bikhchandani

Paper Summary

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When agents have related information, a payment system can make sure all the benefits are taken. This makes agents want to learn about each other's information. Certain payment schemes can fully extract benefits or make things work well when there's a chance to learn more. Conditions for these schemes are figured out. If one agent's info covers others' types, full benefit schemes can't happen. But if all agents share their info, these schemes can work in a bigger type space.