Journal article
Mechanism Design By An Informed Principal: Private Values With Transferable Utility
Year:
2014Published in:
The Review of Economic StudiesInformed-principal problem
Independent private values (IPV)
Monetary transfers
Signaling considerations
Optimal allocation
We provide a solution to the informed-principal problem in the independent private values setting with monetary transfers. The principal's private information creates signaling considerations that may distort the implemented allocation. We show that there is no distortion: all principal types implement an allocation that is optimal for the principal