Title: Keeping the Agents in the Dark: Private Disclosures in Competing Mechanisms (with Eloisa Campioni, Thomas Mariotti, and Alessandro Pavan)

Abstract: We study competing-mechanism games, in which several principals contract with several privately informed agents. We show that enabling the principals to engage into private disclosures - whereby a principal sends to the agents contractible private signals about how her final decision will respond to the agents' messages - can significantly affect the predictions of such games. Our first result is that equilibrium outcomes and payoffs of games without private disclosures may not be supported when private disclosures are allowed for. This challenges the robustness of the folk theorems à la Yamashita (2010). Our second result is that allowing for private disclosures may generate equilibrium outcomes and payoffs that cannot be supported in any game without private disclosures, no matter how rich the message spaces are. This challenges the canonicity of the universal mechanisms of Epstein and Peters (1999). Together, these findings call for a novel approach to the analysis of competing-mechanism games.