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Worst-case efficient and budget-balanced mechanism for single-object allocation with interdependent values

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  • Aditya Vikram

    (Indian Institute of Technology Kanpur)

Abstract

We study a model in which a single object is to be allocated among a set of agents whose valuations are interdependent. We define signal-ranking mechanisms and show that if the signal-ranking allocation rule satisfies a combinatorial condition and the valuation functions are additively separable, there exist budget-balanced and ex-post incentive compatible signal-ranking mechanisms. For a restricted setting, we show that the worst-case efficient mechanism of Long et al. (Games Econ Behav 105:9–39, 2017) continues to be worst-case efficient. We also give an example to show that their mechanism is no longer optimal when restrictions are relaxed.

Suggested Citation

  • Aditya Vikram, 2024. "Worst-case efficient and budget-balanced mechanism for single-object allocation with interdependent values," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 62(1), pages 89-108, February.
    • Handle: RePEc:spr:sochwe:v:62:y:2024:i:1:d:10.1007_s00355-023-01479-x
    DOI: 10.1007/s00355-023-01479-x
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    References listed on IDEAS

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    1. Debasis Mishra & Tridib Sharma, 2018. "A simple budget-balanced mechanism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(1), pages 147-170, January.
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    3. Long, Yan & Mishra, Debasis & Sharma, Tridib, 2017. "Balanced ranking mechanisms," Games and Economic Behavior, Elsevier, vol. 105(C), pages 9-39.
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    5. Swaprava Nath & Onno Zoeter & Y. Narahari & Christopher Dance, 2015. "Dynamic mechanism design with interdependent valuations," Review of Economic Design, Springer;Society for Economic Design, vol. 19(3), pages 211-228, September.
    6. Jehiel, Philippe & Moldovanu, Benny, 2001. "Efficient Design with Interdependent Valuations," Econometrica, Econometric Society, vol. 69(5), pages 1237-1259, September.
    7. Kosenok, Grigory & Severinov, Sergei, 2008. "Individually rational, budget-balanced mechanisms and allocation of surplus," Journal of Economic Theory, Elsevier, vol. 140(1), pages 126-161, May.
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    9. M. Yenmez, 2015. "Incentive compatible market design with applications," International Journal of Game Theory, Springer;Game Theory Society, vol. 44(3), pages 543-569, August.
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