IDEAS home Printed from https://ideas.repec.org/a/eee/gamebe/v68y2010i2p763-772.html
   My bibliography  Save this article

On the uniqueness of Groves mechanisms and the payoff equivalence principle

Author

Listed:
  • Carbajal, Juan Carlos

Abstract

Consider a standard mechanism design setting with quasi-linear preferences and private valuations. From Holmström (1979), we know that if the valuations are smooth with respect to types then any efficient, dominant strategy mechanism is in the class of Groves mechanisms. Here I show that, given regular assumptions on the primitives of the design problem, a weaker condition that includes the case of non-smooth valuations is sufficient and necessary for the uniqueness of Groves mechanisms among all efficient, dominant strategy mechanisms. This condition, which imposes a restriction on the behavior of the one-sided directional derivatives of the valuation functions with respect to individual types, is also shown to be sufficient and necessary to obtain the Payoff Equivalence principle for dominant strategy mechanisms whose choice rules are affine maximizers.

Suggested Citation

  • Carbajal, Juan Carlos, 2010. "On the uniqueness of Groves mechanisms and the payoff equivalence principle," Games and Economic Behavior, Elsevier, vol. 68(2), pages 763-772, March.
  • Handle: RePEc:eee:gamebe:v:68:y:2010:i:2:p:763-772
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0899-8256(09)00193-6
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paul Milgrom & Ilya Segal, 2002. "Envelope Theorems for Arbitrary Choice Sets," Econometrica, Econometric Society, vol. 70(2), pages 583-601, March.
    2. Birgit Heydenreich & Rudolf Müller & Marc Uetz & Rakesh V. Vohra, 2009. "Characterization of Revenue Equivalence," Econometrica, Econometric Society, pages 307-316.
    3. Austen-Smith, David & Banks, Jeffrey S., 2000. "Cheap Talk and Burned Money," Journal of Economic Theory, Elsevier, pages 1-16.
    4. Philippe Jehiel & Moritz Meyer-ter-Vehn & Benny Moldovanu & William R. Zame, 2006. "The Limits of ex post Implementation," Econometrica, Econometric Society, pages 585-610.
    5. Jehiel, Philippe & Moldovanu, Benny, 2001. "Efficient Design with Interdependent Valuations," Econometrica, Econometric Society, pages 1237-1259.
    6. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    7. Sushil Bikhchandani & Shurojit Chatterji & Ron Lavi & Ahuva Mu'alem & Noam Nisan & Arunava Sen, 2006. "Weak Monotonicity Characterizes Deterministic Dominant-Strategy Implementation," Econometrica, Econometric Society, vol. 74(4), pages 1109-1132, July.
    8. Jeroen Suijs, 1996. "On incentive compatibility and budget balancedness in public decision making," Review of Economic Design, Springer;Society for Economic Design, pages 193-209.
    9. Holmstrom, Bengt, 1979. "Groves' Scheme on Restricted Domains," Econometrica, Econometric Society, vol. 47(5), pages 1137-1144, September.
    10. Krishna, Vijay & Maenner, Eliot, 2001. "Convex Potentials with an Application to Mechanism Design," Econometrica, Econometric Society, vol. 69(4), pages 1113-1119, July.
    11. Steven R. Williams, 1999. "A characterization of efficient, bayesian incentive compatible mechanisms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 155-180.
    12. Edward Clarke, 1971. "Multipart pricing of public goods," Public Choice, Springer, vol. 11(1), pages 17-33, September.
    13. Olszewski, Wojciech & Chung, Kim-Sau, 2007. "A non-differentiable approach to revenue equivalence," Theoretical Economics, Econometric Society.
    14. Myerson, R B, 1986. "Acceptable and Predominant Correlated Equilibria," International Journal of Game Theory, Springer;Game Theory Society, vol. 15(3), pages 133-154.
    15. Dirk Bergemann & Juuso Valimaki, 2002. "Information Acquisition and Efficient Mechanism Design," Econometrica, Econometric Society, vol. 70(3), pages 1007-1033, May.
    16. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-631, July.
    17. Myerson, Roger B, 1986. "Multistage Games with Communication," Econometrica, Econometric Society, vol. 54(2), pages 323-358, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mishra, Debasis & Pramanik, Anup & Roy, Souvik, 2014. "Multidimensional mechanism design in single peaked type spaces," Journal of Economic Theory, Elsevier, pages 103-116.
    2. Carbajal, Juan Carlos & Ely, Jeffrey C., 2013. "Mechanism design without revenue equivalence," Journal of Economic Theory, Elsevier, pages 104-133.
    3. Debasis Mishra & Anup Pramanik & Souvik Roy, 2013. "Implementation in multidimensional domains with ordinal restrictions," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 13-07, Indian Statistical Institute, New Delhi, India.
    4. Kiho Yoon, 2015. "On the Uniqueness of Dynamic Groves Mechanisms," Discussion Paper Series 1505, Institute of Economic Research, Korea University.
    5. Juan Carlos Carbajal & Jeffrey C. Ely, 2012. "Mechanism Design Without Revenue Equivalence," Discussion Papers Series 458, School of Economics, University of Queensland, Australia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:68:y:2010:i:2:p:763-772. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/622836 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.