Mechanism Design with Communication Constraints

S-Tier
Journal: Journal of Political Economy
Year: 2014
Volume: 122
Issue: 5
Pages: 1094 - 1129

Authors (2)

Dilip Mookherjee (Boston University) Masatoshi Tsumagari (not in RePEc)

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

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

Abstract

We consider mechanism design in which message sets are restricted owing to communication costs, preventing full revelation of information. A principal contracts with multiple agents each supplying a one-dimensional good at a privately known cost. We characterize optimal mechanisms subject to incentive and communication constraints, without imposing arbitrary restrictions on the number of communication rounds. We show that mechanisms that centralize production decisions are strictly dominated by those that decentralize decision-making authority to agents, and optimal communication mechanisms maximize information exchanged directly among agents. Conditions are provided for these to involve gradual release of information over multiple rounds either simultaneously or sequentially.

Technical Details

RePEc Handle
repec:ucp:jpolec:doi:10.1086/676931
Journal Field
General
Author Count
2
Added to Database
2026-01-26