Xiang Sun、Yeneng Sun、Lei Wu、Nicholas C. Yannelis：Equilibria and incentives in private informationeconomies

【Abstract】This paper considers three solution concepts in a large private information economy, namely, Walrasian expectations equilibrium, private core, and insurance equilibrium. It shows that these three concepts coincide with each other when the agents are informationally negligible in such an economy. In contrast to thefinite-agent setting, one can construct a large private information economy in which incentive compatibility fails completely in the sense that almost every agent in any Walrasian expectations equilibrium/private core/insurance equilibrium allocation has the incentive to misreport her type.

【Keywords】Asymmetric information；Incentive compatibility；Insurance equilibrium；Private core；Private information economy；Walrasian expectations equilibrium

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