Appendix: Incentive-compatible revelation mechanisms attempt to
A) induce an employee to reject the next best alternative employment opportunity
B) elicit privately-held information
C) secure enforcement primarily by third parties
D) reject voluntary contracting with third parties
E) impose similar risk premiums on all employees

Question

Quizplus · Accepted Answer

Incentive-compatible revelation mechanisms are designed to elicit privately-held information from individuals. The mechanism should be such that it incentivizes individuals to reveal their true information (which they might otherwise choose to hide or misrepresent) without putting them at a disadvantage. It is used in various fields including economics, game theory, and auction theory. Other options (A, C, D, and E) are not relevant to the concept of incentive-compatible revelation mechanisms.

Appendix: Incentive-Compatible Revelation Mechanisms Attempt to