Template-type: ReDif-Paper 1.0
Author-Name: Bochet Olivier
Author-workplace-name: METEOR
Title: Switching from Complete to Incomplete Information
Abstract: We construct an elementary mechanism (Dutta, Sen and Vohra (1995)) that Nash implements the Constrained Walrasian correspondence. We extend it to incomplete and non-exclusive information economies by enlarging the message space of agents. We characterize the set of Bayesian equilibrium outcomes of the mechanism, and thus characterize an extension of the Constrained Walrasian correspondence when one switches from complete to incomplete information. First, measurability restrictions on allocations do not emerge from the strategic behavior of agents: there exist simple economies for which the set of Constrained Rational Expectations equilibrium allocations is not contained in the set of equilibrium outcomes of the mechanism. Next, by imposing measurability restrictions on allocations, the mechanism globally implements the Constrained Rational Expectations Equilibrium correspondence. This result shows game-theoretic connections between these two market equilibrium concepts. However, it is obtained at the price of strong restrictions on the behavior of agents.price of strong restrictions on the behavior of agents. 
Keywords: microeconomics ; 
Series: Research Memoranda
Creation-Date: 2005
Number: 035
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:59365f4e-1eaa-44a6-9aed-f7f99b2041fb/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 244716
Handle: RePEc:unm:umamet:2005035