Competition among mechanism designers in a common value environment
A competitive economy is studied in which sellers offer alternative direct mechanisms to buyers who have private information about their own private use value for the commodity being traded. In addition the commodity has a common value to all buyers, perhaps represented by the future resale value of the commodity. A competitive equilibrium in mechanisms is described. In every such equilibrium it is shown that sellers must offer mechanisms that are allocationally equivalent to English ascending price auctions. The reservation prices that sellers set are shown to be below their ex post cost of trading the commodity.
Volume (Year): 4 (1999)
Issue (Month): 3 ()
|Note:||Received: 24 April 1998 / Accepted: 8 March 1999|
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NBER Working Papers
4608, National Bureau of Economic Research, Inc.
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447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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