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A Note on Budget Balance under Interim Participation Constraints: The Case of Independet Types

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  • Tilman Börgers

    ()
    (Department of Economics, University College London)

  • Peter Norman

    ()
    (Department of Economics,University of British Columbia, Vancouver)

Abstract

We provide a simple proof of the equivalence between ex ante and ex post budget balance constraints in Bayesian mechanism design with independent types when participation decisions are made at the interim stage. The result is given an interpretation in terms of efficient allocation of risk.

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Bibliographic Info

Paper provided by Max Planck Institute for Research on Collective Goods in its series Working Paper Series of the Max Planck Institute for Research on Collective Goods with number 2005_14.

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Length: 16 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:mpg:wpaper:2005_14

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References

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  1. Neeman, Z., 1998. "The Relevance of Private Infromation in Mechanism Design," Papers, Boston University - Department of Economics 93, Boston University - Department of Economics.
  2. Andreas Pape & Subir Bose & Emre Ozdenoren, 2004. "Optimal auctions with ambiguity," Econometric Society 2004 North American Summer Meetings 609, Econometric Society.
  3. Fang, Hanming & Norman, Peter, 2005. "Overcoming Participation Constraints," Microeconomics.ca working papers, Vancouver School of Economics norman-05-04-22-05-35-30, Vancouver School of Economics, revised 28 Apr 2005.
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  5. Yeon-Koo Che & Jinwoo Kim, 2006. "Robustly Collusion-Proof Implementation," Econometrica, Econometric Society, Econometric Society, vol. 74(4), pages 1063-1107, 07.
  6. d'ASPREMONT, Claude & CRÉMER, Jacques & GÉRARD-VARET, Louis-André, 2002. "Balanced Bayesian mechanisms," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2002048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Vijay Krishna & Motty Perry, 1997. "Efficient Mechanism Design," Game Theory and Information, EconWPA 9703010, EconWPA, revised 28 Apr 1998.
  8. Cremer, Jacques & McLean, Richard P, 1985. "Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent," Econometrica, Econometric Society, Econometric Society, vol. 53(2), pages 345-61, March.
  9. Cremer, Jacques, & Riordan, Michael H, 1985. "A Sequential Solution to the Public Goods Problem," Econometrica, Econometric Society, Econometric Society, vol. 53(1), pages 77-84, January.
  10. Eso, Peter & Futo, Gabor, 1999. "Auction design with a risk averse seller," Economics Letters, Elsevier, vol. 65(1), pages 71-74, October.
  11. d'ASPREMONT, Claude & GERARD-VARET, Louis-André, . "Incentives and incomplete information," CORE Discussion Papers RP -354, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. Makowski Louis & Mezzetti Claudio, 1994. "Bayesian and Weakly Robust First Best Mechanisms: Characterizations," Journal of Economic Theory, Elsevier, vol. 64(2), pages 500-519, December.
  13. Partha Dasgupta & Eric Maskin, 2000. "Efficient Auctions," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 115(2), pages 341-388, May.
  14. Drew Fudenberg & David K. Levine & Eric Maskin, 1996. "Balanced-Budget Mechanisms with Incomplete Information," Levine's Working Paper Archive 59, David K. Levine.
  15. Cremer, Jacques & McLean, Richard P, 1988. "Full Extraction of the Surplus in Bayesian and Dominant Strategy Auctions," Econometrica, Econometric Society, Econometric Society, vol. 56(6), pages 1247-57, November.
  16. McAfee, R Preston & Reny, Philip J, 1992. "Correlated Information and Mechanism Design," Econometrica, Econometric Society, Econometric Society, vol. 60(2), pages 395-421, March.
  17. repec:wop:humbsf:2000-72 is not listed on IDEAS
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Citations

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Cited by:
  1. Hakenes, Hendrik & Schnabel, Isabel, 2006. "The Threat of Capital Drain: A Rationale for Public Banks?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 107, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. Tröger, Thomas & Mylovanov, Timofiy, 2012. "Mechanism design by an informed principal: the quasi-linear private-values case," Working Papers 12-14, University of Mannheim, Department of Economics.
  3. Ensthaler, Ludwig & Giebe, Thomas, 2014. "Bayesian optimal knapsack procurement," European Journal of Operational Research, Elsevier, vol. 234(3), pages 774-779.
  4. Hanming Fang & Peter Norman, 2014. "Toward an efficiency rationale for the public provision of private goods," Economic Theory, Springer, vol. 56(2), pages 375-408, June.
  5. Ludwig Ensthaler & Thomas Giebe, 2010. "How to allocate Research (and other) Subsidies," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1517, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Stefano Barbieri & David Malueg, 2014. "Group efforts when performance is determined by the “best shot”," Economic Theory, Springer, vol. 56(2), pages 333-373, June.
  7. Hanming Fang & Peter Norman, 2008. "Optimal Provision of Multiple Excludable Public Goods," NBER Working Papers 13797, National Bureau of Economic Research, Inc.
  8. Eilat, Ran & Pauzner, Ady, 2011. "Optimal bilateral trade of multiple objects," Games and Economic Behavior, Elsevier, vol. 71(2), pages 503-512, March.
  9. Rong, Kang, 2014. "Proportional individual rationality and the provision of a public good in a large economy," Journal of Mathematical Economics, Elsevier, vol. 51(C), pages 187-196.
  10. Serkan Kucuksenel, 2012. "Interim efficient auctions with interdependent valuations," Journal of Economics, Springer, vol. 106(1), pages 83-93, May.
  11. Peter Norman & Hanming Fang, 2010. "Toward an Efficiency Rationale for the Public Provision of Private Goods," 2010 Meeting Papers 1185, Society for Economic Dynamics.
  12. Felix Bierbrauer & Nick Netzer, 2012. "Mechanism design and intentions," ECON - Working Papers, Department of Economics - University of Zurich 066, Department of Economics - University of Zurich, revised Apr 2014.
  13. Bierbrauer, Felix J., 2011. "Incomplete contracts and excludable public goods," Journal of Public Economics, Elsevier, vol. 95(7), pages 553-569.

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