Efficient Mechanism Design
AbstractWe study Bayesian mechanism design in situations where agents' information may be multi-dimensional, concentrating on mechanisms that lead to efficient allocations. Our main result is that a generalization of the well-known Vickrey-Clarke-Groves mechanism maximizes the planner's "revenue'' among all efficient mechanisms. This result is then used to study multiple object auctions in situations where bidders have privately known "demand curves'' and extended to include situations with complementarities across objects or externalities across bidders. We also illustrate how the main result may be used to analyze the possibility of allocating both private and public goods efficiently when budget balance considerations are important. The generalized VCG mechanism, therefore, serves to unify many results in mechansim design theory.
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Bibliographic InfoPaper provided by EconWPA in its series Game Theory and Information with number 9703010.
Length: 24 pages
Date of creation: 25 Mar 1997
Date of revision: 28 Apr 1998
Note: Type of Document - SciWord-LaTex; prepared on IBM PC ; to print on HP Laserjet 4; pages: 24 ; figures: None
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Mechanism Design; Efficiency; Incentives; Auctions;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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