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A general characterization of interim efficient mechanisms for independent linear environments

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  • Ledyard, John O.
  • Palfrey, Thomas R.

Abstract

We consider the class of Bayesian environments with independent types, and utility functions which are both quasi-linear in a private good and linear in a one-dimensional private-value type parameter. We call these "independent linear environments". For these environments, we fully characterize interim efficient allocation rules which satisfy interim incentive compatibility and interim individual rationality constraints. We also prove that they correspond to decision rules based on virtual surplus maximization, together with the appropriate incentive taxes. We demonstrate how these techniques can be applied easily to the design of auctions, markets, bargaining rules, public good provision, and assignment problems.
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  • Ledyard, John O. & Palfrey, Thomas R., 2007. "A general characterization of interim efficient mechanisms for independent linear environments," Journal of Economic Theory, Elsevier, vol. 133(1), pages 441-466, March.
  • Handle: RePEc:eee:jetheo:v:133:y:2007:i:1:p:441-466
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    Cited by:

    1. Ludwig Ensthaler & Thomas Giebe & Jianpei Li, 2014. "Speculative partnership dissolution with auctions," Review of Economic Design, Springer;Society for Economic Design, vol. 18(2), pages 127-150, June.
    2. Matthew Ellman & Sjaak Hurkens, 2014. "Optimal Crowdfunding Design," Working Papers 14-21, NET Institute.
    3. Serkan Kucuksenel, 2012. "Interim efficient auctions with interdependent valuations," Journal of Economics, Springer, vol. 106(1), pages 83-93, May.
    4. Hanming Fang & Peter Norman, 2010. "Optimal Provision of Multiple Excludable Public Goods," American Economic Journal: Microeconomics, American Economic Association, vol. 2(4), pages 1-37, November.
    5. Chakravarty, Surajeet & Kaplan, Todd R., 2013. "Optimal allocation without transfer payments," Games and Economic Behavior, Elsevier, vol. 77(1), pages 1-20.
    6. Kopányi-Peuker, Anita & Offerman, Theo & Sloof, Randolph, 2017. "Fostering cooperation through the enhancement of own vulnerability," Games and Economic Behavior, Elsevier, vol. 101(C), pages 273-290.
    7. Kim, Jin Yeub, 2017. "Interim third-party selection in bargaining," Games and Economic Behavior, Elsevier, vol. 102(C), pages 645-665.
    8. Barbieri, Stefano & Malueg, David A., 2010. "Threshold uncertainty in the private-information subscription game," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 848-861, December.
    9. Loertscher, Simon & Marx, Leslie M., 2017. "Club good intermediaries," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 430-459.
    10. Murat Yilmaz, 2010. "Auctioning a Discrete Public Good under Incomplete Information," Working Papers 2010/14, Bogazici University, Department of Economics.
    11. Ahmet Altiok & Murat Yilmaz, 2014. "Dynamic Voluntary Contribution to a Public Project under Time-Inconsistency," Working Papers 2014/08, Bogazici University, Department of Economics.
    12. repec:eee:jeborg:v:145:y:2018:i:c:p:114-140 is not listed on IDEAS

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