A non-differentiable approach to revenue equivalence
AbstractWe give a sufficient condition on the type space for revenue equivalence when the set of social alternatives consists of probability distributions over a finite set. Types are identified with real-valued functions that assign valuations to elements of this finite set, and the type space is equipped with the Euclidean topology. Our sufficient condition is stronger than connectedness but weaker than smooth arcwise connectedness. Our result generalizes all existing revenue equivalence theorems when the set of social alternatives consists of probability distributions over a finite set. When the set of social alternatives is finite, we provide a necessary and sufficient condition. This condition is similar to, but slightly weaker than, connectedness.
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Bibliographic InfoArticle provided by Econometric Society in its journal Theoretical Economics.
Volume (Year): 2 (2007)
Issue (Month): 4 (December)
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Web page: http://econtheory.org
Revenue equivalence; mechanism design; incentive compatibility; non-differentiable approach; connected type space;
Find related papers by JEL classification:
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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- First:Birgit Heydenreich & Rudolf Muller & Marc Uetz & Rakesh Vohra, 2007.
"Characterization of Revenue Equivalence,"
1448, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Heydenreich, Birgit & Müller, Rudolf & Uetz, Marc & Vohra, Rakesh, 2008. "Characterization of Revenue Equivalence," Research Memoranda 001, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
- Müller, Rudolf & Uetz, Marc & Vohra, Rakesh & Heydenreich, Birgit, 2007. "Characterization of Revenue Equivalence," Research Memoranda 017, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
- Carbajal, Juan Carlos, 2010. "On the uniqueness of Groves mechanisms and the payoff equivalence principle," Games and Economic Behavior, Elsevier, vol. 68(2), pages 763-772, March.
- Debasis Mishra & Souvik Roy, 2011.
"Implementation in multidimensional dichotomous domains,"
Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers
11-15, Indian Statistical Institute, New Delhi, India.
- Mishra, Debasis & Roy, Souvik, 2013. "Implementation in multidimensional dichotomous domains," Theoretical Economics, Econometric Society, vol. 8(2), May.
- Carbajal, Juan Carlos & Ely, Jeffrey C., 2013. "Mechanism design without revenue equivalence," Journal of Economic Theory, Elsevier, vol. 148(1), pages 104-133.
- Muto, Nozomu & Yasuhiro, Shirata, 2013. "Goods Revenue Monotonicity in Combinatorial Auctions," Discussion Papers 2013-13, Graduate School of Economics, Hitotsubashi University.
- Monteiro, Paulo Klinger & Svaiter, Benar Fux, 2010.
"Optimal auction with a general distribution: Virtual valuation without densities,"
Journal of Mathematical Economics,
Elsevier, vol. 46(1), pages 21-31, January.
- Svaiter, Benar Fux & Monteiro, Paulo Klinger, 2008. "Optimal auction with a general distribution: virtual valuation without densities," Economics Working Papers (Ensaios Economicos da EPGE) 681, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- M. Bumin Yenmez, 2009. "Incentive Compatible Market Design with Applications," GSIA Working Papers 2013-E21, Carnegie Mellon University, Tepper School of Business.
- Juan Carlos Carbajal & Jeffrey C. Ely, 2012. "Mechanism Design Without Revenue Equivalence," Discussion Papers Series 458, School of Economics, University of Queensland, Australia.
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