Regular type distributions in mechanism design and $$\rho $$ -concavity
AbstractSome of the best-known results in mechanism design depend critically on Myerson’s (Math Oper Res 6:58–73, 1981 ) regularity condition. For example, the second-price auction with reserve price is revenue maximizing only if the type distribution is regular. This paper offers two main findings. First, a new interpretation of regularity is developed—similar to that of a monotone hazard rate—in terms of being the next to fail. Second, using expanded concepts of concavity, a tight sufficient condition is obtained for a density to define a regular distribution. New examples of regular distributions are identified. Applications are discussed. Copyright Springer-Verlag 2013
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 53 (2013)
Issue (Month): 3 (August)
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Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- C16 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Econometric and Statistical Methods; Specific Distributions
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