The genericity of beliefs-determine-preferences models revisited

Yi-Chun Chen, Siyang Xiong*

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

7 Citations (Scopus)

Abstract

Barelli [P. Barelli, On the genericity of full surplus extraction in mechanism design, J. Econ. Theory 144 (2009) 1320-1332] defines beliefs-determine-preferences (BDP) models and argues that BDP models are nongeneric in a topological sense. In this note, we point out some difficulties in Barelli's approach. Furthermore, we follow the idea of Heifetz and Neeman [A. Heifetz, Z. Neeman, On the generic (im)possibility of full surplus extraction, Econometrica 74 (2006) 213-233] to propose a more relevant notion of BDP* model. We prove that BDP* models are generic, which is opposite to Barelli's conclusion. (C) 2010 Elsevier Inc. All rights reserved.

Original languageEnglish
Pages (from-to)751-761
Number of pages11
JournalJournal of Economic Theory
Volume146
Issue number2
DOIs
Publication statusPublished - Mar 2011

Keywords

  • Mechanism design
  • Full surplus extraction
  • Beliefs-determine-preferences priors
  • Common priors

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