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Research interestMicroeconomic Theory (primary)
Job market paperRent Extraction with Information Acquisition
This paper revisits the classic mechanism design question of when buyers with private information in an auction setting can expect to receive economic rents. It is well known that under standard assumptions, the seller can fully extract rent for generic prior distributions over the valuations of the buyers. However, a crucial assumption underlying this result is that the buyers are not able to acquire any additional information about each other. This assumption can be seen as a special case of a general model where buyers have access to some information acquisition technology. We provide necessary and sufficient conditions on the information acquisition technology that allows the seller to fully extract rent, and we show that the set of information acquisition technologies where these conditions are satisfied is small in a topological sense.
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Placement OfficerProfessor Mark Schankerman
SupervisorDr Francesco Nava
ReferencesDr Francesco NavaProfessor Balazs SzentesProfessor Ronny Razin
Phone number+44 (0)75 3053 2245
Office AddressDepartment of Economics, London School of Economics and Political Science, Houghton Street, London WC2A 2AE
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