Beliefs,payoffs, information: On the robustness of the BDP property in models with endogenous beliefs |
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| Affiliation: | 1. National Institute of Mental Health, NIH, Bethesda, MD, USA;2. Laureate Institute for Brain Research, Tulsa, OK, USA;3. The University of Tulsa, Tulsa, OK, USA;4. Department of Neurobiology and Anatomy, University of Texas Medical School, Houston, TX, USA;1. Department of Mathematics, University of Colorado at Boulder, United States;2. Department of Economics, University of Haifa, Israel;1. Economic Research Unit, Indian Statistical Institute, 203 Barackpore Trunk Road, 700108 Kolkata, India;2. Dipartimento di Scienze Economiche e Statistiche and CSEF, University of Napoli Federico II, Complesso Monte S. Angelo, Via Cintia, Napoli 80126, Italy;1. Department of Economics and Management, University of Pisa, Italy;2. CNRS, CMAP - Ecole Polytechnique, France;1. Cognitive Neuroscience, Institute of Neuroscience and Medicine (INM-3), Research Centre Juelich, 52425 Juelich, Germany;2. Department of Neurology, University Hospital Cologne, 50937 Cologne, Germany |
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| Abstract: | Neeman (2004) and Heifetz and Neeman (2006) have shown that, in auctions with incomplete information about payoffs, full surplus extraction is only possible if agents’ beliefs about other agents are fully informative about their own payoff parameters. They argue that the set of incomplete-information models with common priors that satisfy this so-called BDP property (“beliefs determine preferences”) is negligible. In contrast, we show that, in models with finite-dimensional abstract type spaces, the set of belief functions with this property is topologically generic in the set of all belief functions. Our result implies genericity of (non-common or common) priors with the BDP property. |
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| Keywords: | Abstract type spaces Mechanism design Correlated information Belief functions BDP property |
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