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Regular type distributions in mechanism design and $$\rho $$ -concavity

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  • Christian Ewerhart

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Abstract

Some of the best-known results in mechanism design depend critically on Myerson’s (Math Oper Res 6:58–73, 1981 ) regularity condition. For example, the second-price auction with reserve price is revenue maximizing only if the type distribution is regular. This paper offers two main findings. First, a new interpretation of regularity is developed—similar to that of a monotone hazard rate—in terms of being the next to fail. Second, using expanded concepts of concavity, a tight sufficient condition is obtained for a density to define a regular distribution. New examples of regular distributions are identified. Applications are discussed. Copyright Springer-Verlag 2013

Suggested Citation

  • Christian Ewerhart, 2013. "Regular type distributions in mechanism design and $$\rho $$ -concavity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(3), pages 591-603, August.
  • Handle: RePEc:spr:joecth:v:53:y:2013:i:3:p:591-603
    DOI: 10.1007/s00199-012-0705-3
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    References listed on IDEAS

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    Cited by:

    1. Ryan Cumings, 2017. "Shape-Constrained Density Estimation Via Optimal Transport," Papers 1710.09069, arXiv.org.

    More about this item

    Keywords

    Virtual valuation; Regularity; Generalized concavity; Prékopa–Borell theorem; Mechanism design; D82; D44; D86; C16;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • C16 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Econometric and Statistical Methods; Specific Distributions

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