Competition Among Mechanism Designers in a Common Value Environment
AbstractA competitive economy is studied in which sellers offer alternative direct mechanisms to buyers who have private information about their own private use value for the commodity being traded. In addition the commodity has a common value to all buyers, perhaps represented by the future resale value of the commodity. A competitive equilibrium in mechanisms is described. In every such equilibrium it is shown that sellers must offer mechanisms that are allocationally equivalent to English ascending price auctions. The reservation prices that sellers set are equal to the ex post value of a 'marginal' unsold unit. This value is below the ex post opportunity cost to the seller of trading the commodity.
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Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number peters-96-01.
Length: 30 pages
Date of creation: 15 Apr 1996
Date of revision:
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Other versions of this item:
- Michael Peters, 1999. "Competition among mechanism designers in a common value environment," Review of Economic Design, Springer, vol. 4(3), pages 273-292.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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.:
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