On the genericity of full surplus extraction in mechanism design
AbstractHeifetz and Neeman [A. Heifetz, Z. Neeman, On the generic (im)possibility of full surplus extraction, Econometrica 74 (2006) 213-233], using convex combinations of models, showed that full surplus extraction (FSE) in mechanism design is generically impossible, contrary to the seminal work of Cremer and McLean [J. Cremer, R. McLean, Full extraction of the surplus in Bayesian and dominant strategy auctions, Econometrica 53 (1988) 345-361]. Since Cremer and McLean did not allow convex combinations of models, the two results are not comparable. We show that FSE is generically impossible when convex combinations of models are not allowed, provided that we do not hold fixed the cardinality of models.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 144 (2009)
Issue (Month): 3 (May)
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Web page: http://www.elsevier.com/locate/inca/622869
Full surplus extraction Mechanism design Universal beliefs space Common knowledge;
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