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Characterization of Revenue Equivalence

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Listed:
  • Birgit Heydenreich
  • Rudolf Müller
  • Marc Uetz
  • Rakesh V. Vohra

Abstract

The property of an allocation rule to be implementable in dominant strategies by a unique payment scheme is called revenue equivalence. We give a characterization of revenue equivalence based on a graph theoretic interpretation of the incentive compatibility constraints. The characterization holds for any (possibly infinite) outcome space and many of the known results are immediate consequences. Moreover, revenue equivalence can be identified in cases where existing theorems are silent. Copyright 2009 The Econometric Society.

Suggested Citation

  • Birgit Heydenreich & Rudolf Müller & Marc Uetz & Rakesh V. Vohra, 2009. "Characterization of Revenue Equivalence," Econometrica, Econometric Society, vol. 77(1), pages 307-316, January.
    • Handle: RePEc:ecm:emetrp:v:77:y:2009:i:1:p:307-316
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    1. Paul Milgrom & Ilya Segal, 2002. "Envelope Theorems for Arbitrary Choice Sets," Econometrica, Econometric Society, vol. 70(2), pages 583-601, March.
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    5. Krishna, Vijay & Maenner, Eliot, 2001. "Convex Potentials with an Application to Mechanism Design," Econometrica, Econometric Society, vol. 69(4), pages 1113-1119, July.
    6. Klemperer, Paul, 1999. " Auction Theory: A Guide to the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 13(3), pages 227-86, July.
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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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