In McLean and Postlewaite (2002), we analyzed pure exchange economies with asymmetrically informed agents. We defined a notion of informational size and showed that, when the aggregate information of all agents resolves nearly all the uncertainty regarding the state of nature, the conflict...

We consider repeated games with private monitoring that are .close. to repeated games with public/perfect monitoring. A private monitoring information structure is close to a public monitoring information structure when private signals can generate approximately the same distribution of the...

Conflicts of interest arise between a decision maker and agents who have information pertinent to the problem because of differences in their preferences over outcomes. We show how the decision maker can extract the information by distorting the decisions that will be taken, and show that only...

It is understood that rational expectations equilibria may not be incentive compatible: agents with private information may be able to affect prices through the information conveyed by their market behavior. We present a simple general equilibrium model to illustrate the connection between the...

We develop an auction model for the case of interdependent values and multidimensional signals in which agents’ signals are correlated. We provide conditions under which a modification of the Vickrey auction which includes payments to the bidders will result in an ex post efficient outcome....

We analyze the ex ante incentive compatible core for replicated private information economies. We show that any allocation in the core when the economy is replicated sufficiently often is approximately Walrasian for the associated Arrow-Debreu economy.

For repeated games with noisy private monitoring and communication, we examine robustness of perfect public equilibrium/subgame perfect equilibrium when private monitoring is "close" to some public monitoring. Private monitoring is "close" to public monitoring if the private signals can generate...

It is well-known that the ability of the Vickrey-Clarke-Groves (VCG) mechanism to implement efficient outcomes for private value choice problems does not extend to interdependent value problems. When an agent’s type affects other agents’ utilities, it may not be incentive compatible for him...

It is well-known that the ability of the Vickrey-Clarke-Groves (VCG) mechanism to implement efficient outcomes for private value choice problems does not extend to interdependent value problems. When an agent’s type affects other agents’ utilities, it may not be incentive compatible for him...

We showed in McLean and Postlewaite (2014) that when agents are informationally small, there exist small modifications to VCG mechanisms in interdependent value problems that restore incentive compatibility. This paper presents a two-stage mechanism that similarly restores incentive...