We develop a tool akin to the revelation principle for mechanism design with
limited commitment. We identify a canonical class of mechanisms rich enough to
replicate the payoffs of any equilibrium in a mechanism-selection game between
an uninformed designer and a privately informed agent. A cornerstone of our
methodology is the idea that a mechanism should encode not only the rules that
determine the allocation, but also the information the designer obtains from
the interaction with the agent. Therefore, how much the designer learns, which
is the key tension in design with limited commitment, becomes an explicit part
of the design. We show how this insight can be used to transform the designer's
problem into a constrained optimization one: To the usual truthtelling and
participation constraints, one must add the designer's sequential rationality
constraint.Comment: Added an omitted assumption in Section 4 (see footnote 21 and the
proof of Proposition 4.1
