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Local incentive compatibility with transfers

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  • Mishra, Debasis
  • Pramanik, Anup
  • Roy, Souvik

Abstract

We consider locally incentive compatible mechanisms with deterministic allocation rules and transfers with quasilinear utility. We identify a rich class of type spaces, which includes the single peaked type space, where local incentive compatibility does not imply incentive compatibility. Our main result shows that in such type spaces, a mechanism is locally incentive compatible and payment-only incentive compatible if and only if it is incentive compatible. Payment-only incentive compatibility requires that a mechanism that generates the same allocation at two types must have the same payment at those two types. Our result works on a class of ordinal type spaces, which are generated by considering a set of ordinal preferences over alternatives and then considering all non-negative type vectors representing such preferences.

Suggested Citation

  • Mishra, Debasis & Pramanik, Anup & Roy, Souvik, 2016. "Local incentive compatibility with transfers," Games and Economic Behavior, Elsevier, vol. 100(C), pages 149-165.
    • Handle: RePEc:eee:gamebe:v:100:y:2016:i:c:p:149-165
    DOI: 10.1016/j.geb.2016.09.009
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    Cited by:

    1. Mishra, Debasis, 2016. "Ordinal Bayesian incentive compatibility in restricted domains," Journal of Economic Theory, Elsevier, vol. 163(C), pages 925-954.
    2. André Berger & Rudolf Müller & Seyed Hossein Naeemi, 2017. "Characterizing implementable allocation rules in multi-dimensional environments," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(2), pages 367-383, February.
    3. Roy, Souvik & Kumar, Ujjwal, 2021. "Local incentive compatibility in non-convex type-spaces," MPRA Paper 110872, University Library of Munich, Germany.
    4. Kumar, Ujjwal & Roy, Souvik, 2021. "Local incentive compatibility in ordinal type-spaces," MPRA Paper 110994, University Library of Munich, Germany.

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    More about this item

    Keywords

    Local incentive compatibility; Payment-only incentive compatibility; Single peaked type space; Ordinal type space;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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