INFORMATIONAL SIZE AND INCENTIVE COMPATIBILITY

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1、Econometrica,Vol.70,No.6(November,2002),2421–2453INFORMATIONALSIZEANDINCENTIVECOMPATIBILITYByRichardMcLeanandAndrewPostlewaite1Weexamineageneralequilibriummodelwithasymmetricallyinformedagents.Thepresenceofasymmetricinformationgenerallypresentsaconflictbetweenincentivecom-pati

2、bilityandParetoefficiency.Wepresentanotionofinformationalsizeandshowthattheconflictbetweenincentivecompatibilityandefficiencycanbemadearbitrarilysmallifagentsareofsufficientlysmallinformationalsize.Keywords:Incentivecompatibility,mechanismdesign,incompleteinformation.1
introducti

3、onTheincompatibilityofParetoefficiencyandincentivecompatibilityisacentralthemeineconomicsandgametheory.Theissuesassociatedwiththisincompatibilityareparticularlyimportantinthedesignofresourceallocationmechanismsinthepresenceofasymmetricallyinformedagentswheretheneedtoacquireinf

4、ormationfromagentsinordertocomputeefficientoutcomesandtheincentivesagentshavetomisrepresentthatinformationforpersonalgaincomeintoconflict.Despitealargeliteraturethatfocusesontheseissues,therehasbeenlittleworkaimedatunderstandingthosesituationsinwhichinformationalasymmetriesareq

5、uantitativelyimportant.Virtuallyeverytransactionischaracterizedbysomeasymmetryofinformation:anyinvestorwhobuysorsellsashareofstockgenerallyknowssomethingrel-evanttothevalueofthesharethatisnotknowntothepersonontheothersideofthetransaction.Inordertofocusonmoresalientaspectsofth

6、eproblem,manymodels(rightly)ignoretheincentiveproblemsassociatedwithinforma-tionalasymmetriesinthebeliefthat,fortheproblemathand,agentsare“infor-mationallysmall.”However,fewresearchershaveinvestigatedthecircumstancesunderwhichananalysisthatignorestheseincentiveproblemswillyie

7、ldresultssimilartothoseobtainedwhentheseproblemsarefullyaccountedfor.Inthispaper,westudyaclassofmechanismdesignproblems.Ourgoalistoformalizeinformationalsizeinawaythat,whenagentsareinformationallysmall,1Earlyversionsofthispapercirculatedunderthetitles“InformationalSmallnessan

8、dParetoEffi-ciency”and“InformationalSmallnessandIncentiveCompatibilit