Instituto de Economía

Abstract: In most of the mechanism design literature, claims made by the agent about his type are thought to be either verifiable or non-verifiable. In this paper, I develop the notion of partial verifiability. I then use this notion to show that, when the agent’s utility is independent of his type, the result that the principal’s commitment power is irrelevant, which holds when the agent’s claims are perfectly verifiable, no longer does when there is only partial verifiability.