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Publication - Professor Siyang Xiong

    The genericity of beliefs-determine-preferences models revisited


    Chen, Y-C & Xiong, S, 2011, ‘The genericity of beliefs-determine-preferences models revisited’. Journal of Economic Theory, vol 146., pp. 751-761


    Barelli [P. Barelli, On the genericity of full surplus extraction in mechanism design, J. Econ. Theory 144 (2009) 1320-1332] defines beliefs-determine-preferences (BDP) models and argues that BDP models are nongeneric in a topological sense. In this note, we point out some difficulties in Barelli's approach. Furthermore, we follow the idea of Heifetz and Neeman [A. Heifetz, Z. Neeman, On the generic (im)possibility of full surplus extraction, Econometrica 74 (2006) 213-233] to propose a more relevant notion of BDP* model. We prove that BDP* models are generic, which is opposite to Barelli's conclusion. (C) 2010 Elsevier Inc. All rights reserved.

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