Theoretical Economics
Journal of the Econometric Society
Edited by: Federico Echenique • ISSN (e): 1555-7561 • ISSN (print): 1933-6837
Edited by: Federico Echenique • ISSN (e): 1555-7561 • ISSN (print): 1933-6837
Theoretical Economics: May, 2025, Volume 20, Issue 2
https://doi.org/10.3982/TE5805
p. 667-711
Simone Galperti, Jacopo Perego
We study equilibrium behavior in incomplete-information games under two information constraints: seeds and spillovers. The former restricts which agents can initially receive information. The latter specifies how this information spills over to other agents. Our main result characterizes the equilibrium outcomes under these constraints, without making additional assumptions about the agents' initial information. This involves deriving a “revelation-principle” result for settings in which a mediator cannot communicate directly or privately with the agents. Our model identifies which spillovers are more restrictive and which seeds are more influential. We apply our results to a problem of optimal organization design.