The Biais-Martimort-Rochet equilibrium with direct mechanisms

Abstract

In this note we show that the equilibrium characterized by Biais, Martimort and Rochet (Econometrica, 2000) could have been characterized by direct mechanisms even if the Revelation Principle does not apply in their setting. The use of more sophisticated mechanisms, such as menus, was not necessary.Common Agency, Revelation Principle, Direct Mechanisms, Nonlinear Prices.