Please use this identifier to cite or link to this item: https://doi.org/10.3982/ECTA10123
Title: Genericity and Robustness of Full Surplus Extraction
Authors: Chen, Y.-C. 
Xiong, S.
Keywords: Common prior
Genericity
Information rents
Residual set
Surplus extraction
Universal type space
Issue Date: Mar-2013
Source: Chen, Y.-C., Xiong, S. (2013-03). Genericity and Robustness of Full Surplus Extraction. Econometrica 81 (2) : 825-847. ScholarBank@NUS Repository. https://doi.org/10.3982/ECTA10123
Abstract: We study whether priors that admit full surplus extraction (FSE) are generic, an issue that becomes a gauge to evaluate the validity of the current mechanism design paradigm. We consider the space of priors on the universal type space, and thereby relax the assumption of a fixed finite number of types made by Crémer and McLean (1988). We show that FSE priors are topologically generic, contrary to the result of Heifetz and Neeman (2006) that FSE is generically impossible, both geometrically and measure-theoretically. Instead of using the BDP approach or convex combinations of priors adopted in Heifetz and Neeman (2006), we prove our genericity results by showing a robustness property of Crémer-McLean mechanisms. © 2013 The Econometric Society.
Source Title: Econometrica
URI: http://scholarbank.nus.edu.sg/handle/10635/52095
ISSN: 00129682
DOI: 10.3982/ECTA10123
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