Auction Design with Interdependent Valuations: The Generalized Revelation Principle, Efficiency, Full Surplus Extraction and Information Acquisition
AbstractAgents' valuations are interdependent if they depend on the signals of all agents. Previous literature has claimed that with interdependent valuations and multidimen-sional, but independent, signals, efficient auction design is impossible. This paper shows that, on the contrary, it is always possible to find efficient auction mechanisms. Furthermore, it characterizes the conditions under which it is possible to extract the full surplus from the agents. Finally, it shows that it is also possible to provide agents with the incentives for the efficient, ex-ante acquisition of information. All these results rest on the application of a generalized version of the revelation principle, which requires that the designer uses two reporting stages.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2003.21.
Date of creation: Mar 2003
Date of revision:
Auction Design; Interdependent Valuations; Generalized Revelation Principle; Efficiency;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
This paper has been announced in the following NEP Reports:
- NEP-MIC-2004-09-12 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Roger B. Myerson, 1988. "Mechanism Design," Discussion Papers 796, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Motty Perry & Philip J. Reny, 2002. "An Efficient Auction," Econometrica, Econometric Society, vol. 70(3), pages 1199-1212, May.
- Roger B. Myerson, 1978. "Optimal Auction Design," Discussion Papers 362, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Sandro Brusco & Giuseppe Lopomo & S Viswanathan, 2004.
122247000000000379, UCLA Department of Economics.
- Sandro Brusco & Giuseppe Lopomo & S. Viswanathan, 2004. "Merger Mechanisms," Working Papers 2004.7, Fondazione Eni Enrico Mattei.
- Sandro Brusco & Giuseppe Lopomo & S. Viswanathan, 2004. "Merger Mechanisms," Department of Economics Working Papers 04-02, Stony Brook University, Department of Economics.
- S. Viswanathan & S. Brusco & G. Lopomo, 2004. "Mergers Mechanisms," Econometric Society 2004 North American Winter Meetings 317, Econometric Society.
- Philippe Jehiel & Benny Moldovanu, 2004.
"The Design of an Efficient Private Industry,"
Journal of the European Economic Association,
MIT Press, vol. 2(2-3), pages 516-525, 04/05.
- Jehiel, P & Moldovanu, B, 2004. "The design of an efficient private industry," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Stefano Galavotti & Nozomu Muto & Daisuke Oyama, 2011. "On efficient partnership dissolution under ex post individual rationality," Economic Theory, Springer, vol. 48(1), pages 87-123, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (barbara racah).
If references are entirely missing, you can add them using this form.