Econometrica Vol. 70 No. 6 2002

Informational Size and Incentive Compatibility

Richard P. McLean¹; Andrew Postlewaite²

¹ Rutgers Sexual and Reproductive Health and Rights · ² University of Pennsylvania

Abstract

We examine a general equilibrium model with asymmetrically informed agents. The presence of asymmetric information generally presents a conflict between incentive compatibility and Pareto efficiency. We present a notion of informational size and show that the conflict between incentive compatibility and efficiency can be made arbitrarily small if agents are of sufficiently small informational size.

DOI

10.1111/j.1468-0262.2002.00444.x

Volume

70

Issue

6

Pages

2421-2453

Language

en

Sources

bibtex:phds-export.bib crossref openalex

Cite

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