Mechanism design by an informed monopolist

Research Project

Project/Area Number	26885081
Research Category	Grant-in-Aid for Research Activity Start-up
Allocation Type	Single-year Grants
Research Field	Economic theory
Research Institution	Komazawa University
Principal Investigator	Nishimura Takeshi 駒澤大学, 経済学部, 講師 (20735229)
Project Period (FY)	2014-08-29 – 2016-03-31
Project Status	Completed (Fiscal Year 2015)
Budget Amount *help	¥2,080,000 (Direct Cost: ¥1,600,000、Indirect Cost: ¥480,000) Fiscal Year 2015: ¥1,040,000 (Direct Cost: ¥800,000、Indirect Cost: ¥240,000) Fiscal Year 2014: ¥1,040,000 (Direct Cost: ¥800,000、Indirect Cost: ¥240,000)
Keywords	メカニズムデザイン理論 / ゲーム理論 / 理論モデルの分析
Outline of Final Research Achievements	We study informed principal problems in a bilateral trade environment where a seller and a buyer have private information about types affecting their cost and valuation. The informed seller has full bargaining power to design a trading mechanism. We prove the existence of the best separating equilibrium for the seller. The seller's interim payoff vector in the equilibrium is determined by that in a particular direct mechanism called the least-cost-separating mechanism. We provide a characterization of the mechanism which shows that each menu in the mechanism takes a simple format called the almost fixed price with entry compensation. We also investigate how the privacy of the seller's information affects allocative efficiency and distributional consequences.