The Design of Ambiguous Mechanisms

S-Tier
Journal: Review of Economic Studies
Year: 2017
Volume: 84
Issue: 1
Pages: 237-276

Authors (3)

Alfredo di Tillio (not in RePEc) Nenad Kos (not in RePEc) Matthias Messner (Università Commerciale Luigi B...)

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This article explores the sale of an object to an ambiguity averse buyer. We show that the seller can increase his profit by using an ambiguous mechanism. That is, the seller can benefit from hiding certain features of the mechanism that he has committed to from the agent. We then characterize the profit maximizing mechanisms for the seller and characterize the conditions under which the seller can gain by employing an ambiguous mechanism. Finally, we propose a class of ambiguous mechanisms that are easy to implement and perform better than the best non-ambiguous mechanism.

Technical Details

RePEc Handle
repec:oup:restud:v:84:y:2017:i:1:p:237-276.
Journal Field
General
Author Count
3
Added to Database
2026-01-26