Ball, Ian; Kattwinkel, Deniz - In: Theoretical economics : TE ; an open access journal in … 20 (2025) 4, pp. 1247-1284
We introduce a model of probabilistic verification in mechanism design. The principal elicits a message from the agent … profit-maximizing mechanisms with verification. As the verification technology varies, the solution continuously interpolates … between the no-verification solution and full surplus extraction. …