In this paper I characterize the optimal and efficient mechanisms to allocate simultaneously 2 tasks to 2 capacity constrained suppliers. I show that efficiency can always be achieved using some modified second price auctions. The efficient mechanism is optimal in the case of monotone incentives. When countervailing incentives arise, production is distorted from efficiency over a nondegenerate interval of types so as to extract the full surplus over that interval.
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Paper provided by College Dublin, Department of Political Economy- in its series Papers with number
98/4.
Length: 21 pages Date of creation: 1998 Date of revision: Handle: RePEc:fth:dublec:98/4
Contact details of provider: Postal: Ireland; University College Dublin, Department of Political Economy, Centre for Economic Research, Belfield, Dublin 4 Phone: +353-1-7067777 Fax: +353-1-283 0068 Web page: http://www.ucd.ie/economics/ More information through EDIRC
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Find related papers by JEL classification: E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production D44 - Microeconomics - - Market Structure and Pricing - - - Auctions D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
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