Asymmetric Information Bargaining Problems with Many Agents

A yes or no decision must be made about some issue. All agents must agree. The "Coase Theorem" asserts that the efficient outcome will always result. Suppose the value (positive or negative) that an individual attaches to an affirmative decision is privately known to that individual. It is proved, under very mild conditions, that with independent types, as the number of agents increases, the probability of an affirmative efficient decision goes to zero. An example in which it is common knowledge that an affirmative decision is efficient and yet the probability of such a decision goes to zero is given.

[1]  John C. Roberts.  The incentives for correct revelation of preferences and the number of consumers , 1976 .

[2]  Claude d'Aspremont,et al.  On Bayesian incentive compatible mechanisms , 1979 .

[3]  G. Grantham.  The Persistence of Open-Field Farming in Nineteenth-Century France , 1980, The Journal of Economic History.

[4]  Roger B. Myerson,et al.  Optimal Auction Design , 1981, Math. Oper. Res..

[5]  M. Satterthwaite,et al.  Efficient Mechanisms for Bilateral Trading , 1983 .

[6]  Roger B. Myerson,et al.  Bayesian Equilibrium and Incentive-Compatibility: An Introduction , 1983 .

[7]  Gary D. Libecap,et al.  The Influence of Private Contractual Failure on Regulation: The Case of Oil Field Unitization , 1985, Journal of Political Economy.

[8]  Gary D. Libecap,et al.  Oil field unitization: contractual failure in the presence of imperfect information , 1985 .

[9]  Thomas R. Palfrey,et al.  Voter Participation and Strategic Uncertainty , 1985, American Political Science Review.

[10]  Richard P. McLean,et al.  Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent , 1985 .

[11]  P. Cramton,et al.  Dissolving a Partnership Efficiently , 1985 .

[12]  Richard P. McLean,et al.  FULL EXTRACTION OF THE SURPLUS IN BAYESIAN AND DOMINANT STRATEGY AUCTIONS , 1988 .

[13]  R. Rob.  Pollution claim settlements under private information , 1989 .

[14]  Thomas A. Gresik,et al.  The rate at which a simple market converges to efficiency as the number of traders increases: An asymptotic result for optimal trading mechanisms , 1989 .

[15]  J. Rosenthal.  Settlement, Litigation and the Drainage of Marshes in England and France , 1989 .

[16]  George J. Mailath,et al.  Workers Versus Firms: Bargaining Over a Firm's Value , 1990 .

[17]  Peter Cramton,et al.  Cartel Enforcement with Uncertainty About Costs , 1990 .