The rational expectations equilibrium (REE), as introduced in Radner (1979) in a general equilibrium setting à la Arrow–Debreu–McKenzie, often fails to have desirable properties such as universal existence, incentive compatibility and efficiency. We resolve those problems by providing a new...

We study the question of which social choice functions from an abstract type space to a set of outcomes are truthful, i.e., implementable by truthful mechanisms, when utilities are quasi-linear. For convex domains, our main theorem characterizes truthful social choice functions as those...

The set of all Bayesian–Nash equilibrium payoffs that the players can achieve by making conditional commitments at the interim stage of a Bayesian game coincides with the set of all feasible, incentive compatible and interim individually rational payoffs of the Bayesian game. Furthermore, the...

We show that in multi-sender communication games where senders imperfectly observe the state, if the state space is large enough, then there can exist equilibria arbitrarily close to full revelation of the state as the noise in the senders' observations gets small. In the case of replacement...

We study all-pay auctions with multiple prizes. The players have the same value for all the certain prizes except for one uncertain prize for which each player has a private value. We characterize the equilibrium strategy and show that, independent of the ranking of the uncertain prize, if the...

In the basic adverse selection model, a seller makes a contract offer to a privately informed buyer. A fundamental hypothesis of incentive theory is that the seller may want to offer a menu of contracts to separate the buyer types. In the good state of nature, total surplus is not different from...

We consider full implementation in complete-information environments when agents have an arbitrarily small preference for honesty. We offer a condition called separable punishment and show that when it holds and there are at least two agents, any social choice function can be implemented by a...

In a game with incomplete information players receive stochastic signals about the state of nature. The distribution of the signals given the state of nature is determined by the information structure. Different information structures may induce different equilibria.

Prosper, today the second largest social lending marketplace with nearly 1.5 million members and $380 million in funded loans, employed an auction mechanism amongst lenders to finance each borrower's loan until 2010. Given that a basic premise of social lending is cheap loans for borrowers, how...