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Guo, Yingni and Hörner, Johannes (March 2015) Dynamic Mechanisms without Money. Former Series > Working Paper Series > IHS Economics Series 310, 71 p.
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Abstract
We analyze the optimal design of dynamic mechanisms in the absence of transfers. The designer uses future allocation decisions to elicit private information. Values evolve according to a two-state Markov chain. We solve for the optimal allocation rule, which permits a simple implementation. Unlike with transfers, efficiency decreases over time, and both immiseration and its polar opposite are possible long-run outcomes. Considering the limiting environment in which time is continuous, we demonstrate that persistence hurts.
| Item Type: | IHS Series |
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| Keywords: | Mechanism design, Principal-Agent, Token mechanisms |
| Classification Codes (e.g. JEL): | C73, D82 |
| Date Deposited: | 17 Mar 2015 13:55 |
| Last Modified: | 26 Sep 2023 13:15 |
| URI: | https://irihs.ihs.ac.at/id/eprint/3129 |
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