We 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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Length: 24 pages Date of creation: 25 Mar 1997 Date of revision:
28 Apr 1998 Handle: RePEc:wpa:wuwpga:9703010
Note: Type of Document - SciWord-LaTex; prepared on IBM PC ; to print on HP Laserjet 4; pages: 24 ; figures: None Contact details of provider: Web page: http://129.3.20.41
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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
References listed on IDEAS 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.:
Riley, John G & Samuelson, William F, 1981.
"Optimal Auctions,"
American Economic Review,
American Economic Association, vol. 71(3), pages 381-92, June.
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