The Korean Economic Review
A Sufficient Condition for Bayesian Implementation with Side Payments
Bong-Ju Kim (National Assembly Research Service)Year 2013Vol. 29No. 2
Abstract
It is well-known that with three agents and more, Bayesian monotonicity and the selfselection condition are both necessary and sufficient for Bayesian implementation in a general environment. Matsushima (1993) identified a condition, Condition 1, which is equivalent to Bayesian monotonicity under the strict self-selection (SSS) condition in an environment with side payments. This paper identifies a condition that is equivalent to Bayesian monotonicity under the self-selection condition in an environment with side payments when the prior probability is independently distributed. This condition identified here is weak in that its combination with the self-selection condition is weaker than the SSS condition.