Mechanism Design with Interdependent Valuations: Surplus Extraction
AbstractIf valuations are interdependent and agents observe their own allocation payoffs, then two-stage revelation mechanisms expand the set of implementable decision functions. In a two-stage revelation mechanism agents report twice. In the first stage - before the allocation is decided - they report their private signals. In the second stage - after the allocation has been made, but before final transfers are decided - they report their payoffs from the allocation. Conditions are provided under which an uninformed seller can extract (or virtually extract) the full surplus from a sale to privately informed buyers, in spite of the buyersâ signals being independent random variables.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 31 (2007)
Issue (Month): 3 (June)
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Claudio Mezzetti, 2005. "Mechanism Design with Interdependent Valuations: Surplus Extraction," Discussion Papers in Economics 05/1, Department of Economics, University of Leicester, revised Mar 2006.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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