The Revelation Principle in Multistage Games
Name
revelation principle June 2020 3.pdf
Description
Accepted version
Size
611.87 KB
Format
Unknown
Checksum (MD5)
bef872dd34f8d0f346cf6cee340b5470
Author(s)
Sugaya, Takuo
Wolitzky, Alexander Greenberg
Date Issued
August 2020
Journal
Review of Economic Studies
Publisher
Oxford University Press (OUP)
Citation
Sugaya, Takuo and Alexander Wolitzky. “The Revelation Principle in Multistage Games.” Review of Economic Studies (August 2020): rdaa041 © 2020 The Author(s)
Version
Author's final manuscript
Abstract
The communication revelation principle (RP) of mechanism design states that any outcome that can be implemented using any communication system can also be implemented by an incentive-compatible direct mechanism. In multistage games, we show that in general the communication RP fails for the solution concept of sequential equilibrium (SE). However, it holds in important classes of games, including single-agent games, games with pure adverse selection, games with pure moral hazard, and a class of social learning games. For general multistage games, we establish that an outcome is implementable in SE if and only if it is implementable in a canonical Nash equilibrium in which players never take codominated actions. We also prove that the communication RP holds for the more permissive solution concept of conditional probability perfect Bayesian equilibrium.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1093/RESTUD/RDAA041
