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A general characterization of interim efficient mechanisms for independent linear environments

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  • Ledyard, John O.
  • Palfrey, Thomas R.

Abstract

We consider the class of Bayesian environments with independent types, and utility functions which are both quasi-linear in a private good and linear in a one-dimensional private-value type parameter. We call these "independent linear environments". For these environments, we fully characterize interim efficient allocation rules which satisfy interim incentive compatibility and interim individual rationality constraints. We also prove that they correspond to decision rules based on virtual surplus maximization, together with the appropriate incentive taxes. We demonstrate how these techniques can be applied easily to the design of auctions, markets, bargaining rules, public good provision, and assignment problems.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 133 (2007)
Issue (Month): 1 (March)
Pages: 441-466

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Handle: RePEc:eee:jetheo:v:133:y:2007:i:1:p:441-466

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Web page: http://www.elsevier.com/locate/inca/622869

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Cited by:
  1. Surajeet Chakravarty & Todd R. Kaplan, 2010. "Optimal Allocation without Transfer Payments," Discussion Papers 1004, Exeter University, Department of Economics.
  2. Serkan Kucuksenel, 2012. "Interim efficient auctions with interdependent valuations," Journal of Economics, Springer, vol. 106(1), pages 83-93, May.
  3. Hanming Fang & Peter Norman, 2010. "Optimal Provision of Multiple Excludable Public Goods," American Economic Journal: Microeconomics, American Economic Association, vol. 2(4), pages 1-37, November.
  4. Stefano Barbieri & David A. Malueg, 2009. "Threshold Uncertainty in the Private-Information Subscription Game," Working Papers 0903, Tulane University, Department of Economics.
  5. Ludwig Ensthaler & Thomas Giebe & Jianpei Li, 2014. "Speculative partnership dissolution with auctions," Review of Economic Design, Springer, vol. 18(2), pages 127-150, June.
  6. Murat Yilmaz, 2010. "Auctioning a Discrete Public Good under Incomplete Information," Working Papers 2010/14, Bogazici University, Department of Economics.

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