2024/11/06 by S. Nageeb Ali, Ali, S. Nageeb, Andreas Kleiner +3 · 2 citations
Decision Sciences · Economics, Econometrics and Finance · #Auction Theory and Applications #FOS: Economics and business #Game Theory and Applications #Game Theory and Voting Systems #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.2411.03608
openalex publication_date 2024/11/06 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
This paper studies the role of hard information in contractual and market settings in which the receiver can flexibly adjust allocations and transfers in response to the sender's disclosure. These settings include monopoly pricing, bilateral trade with interdependent values, insurance contracting, and policy negotiations. Across these settings, the sender is worst off if she reveals her type completely: if her type becomes known, the receiver can adjust the terms of trade to extract her surplus. Taking this feature as our central departure from the literature, we characterize the entire set of equilibrium payoffs across these disclosure games. We establish an equivalence result: every payoff profile that can be achieved through information design can also be approximated by an equilibrium of the disclosure game. Thus, hard information enables the sender to attain her commitment payoff without having to commit to an information structure. Moreover, this result highlights how verifiability can empower the sender in settings in which bargaining power resides with the receiver.