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Optimal mechanism design with approximate incentive compatibility and many players

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  • Pathikrit Basu

Abstract

We consider a setting in which a mechanism designer must choose the appropriate social alternative depending on the state of nature. We study the problem of optimal design and demonstrate that a mechanism which allocates resources so as to achieve the social optimum and assigns payments equal to the posterior expected utility of the agent at the social optimum, is an epsilon-optimal mechanism for environments with many players.

Suggested Citation

  • Pathikrit Basu, 2023. "Optimal mechanism design with approximate incentive compatibility and many players," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 8(1), pages 97-106, December.
    • Handle: RePEc:jmi:articl:jmi-v8i1a4
    DOI: 10.22574/jmid.2023.12.004
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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