We examine a general equilibrium model with asymmetrically informed agents. The presence of asymmetric information generally presents a conflict between incentive compatibility and Pareto efficiency. We present a notion of informational size and show that the conflict between incentive compatibility and efficiency can be made arbitrarily small if agents are of sufficiently small informational size.
MLA
McLean, Richard, and Andrew Postlewaite. “Informational Size and Incentive Compatibility.” Econometrica, vol. 70, .no 6, Econometric Society, 2002, pp. 2421-2453, https://doi.org/10.1111/j.1468-0262.2002.00444.x
Chicago
McLean, Richard, and Andrew Postlewaite. “Informational Size and Incentive Compatibility.” Econometrica, 70, .no 6, (Econometric Society: 2002), 2421-2453. https://doi.org/10.1111/j.1468-0262.2002.00444.x
APA
McLean, R., & Postlewaite, A. (2002). Informational Size and Incentive Compatibility. Econometrica, 70(6), 2421-2453. https://doi.org/10.1111/j.1468-0262.2002.00444.x
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