This research funds work in economic theory. The goal is to develop a new approach to the mechanism design for applications in which the mechanism designer/proposer has private information.
Previous research on mechanism design by a privately informed individual is based on modeling assumptions that exclude many market environments. This new research effort does not use these restrictive assumptions, so the new theory is applicable to a much broader range of real world situations. The researchers (1) examine equilibrium uniqueness in the resulting game; (2) compare the different solution concepts previously developed by other researchers to determine if these concepts actually give the same solution in a specific class of games. (3)Use the new approach to analyze applications to multi unit auctions and labor supply contracts.
Insights from basic research into the principles of effective mechanism design are yielding substantial benefit to society as a whole. New market designs are bringing buyers and sellers together in new ways.
