A Note on Optimal Auctions
This paper considers a general optimal auction problem, with many goods and with a buyer’s utility that can depend non-linearly in his type. We point out that incentive compatibility constraints may be binding even if virtual utilities are strictly increasing in the buyer’s type. More importantly, optimal mechanisms may involve randomizations between different allocations.
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References listed on IDEAS
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- Riley, John G & Samuelson, William F, 1981.
American Economic Review,
American Economic Association, vol. 71(3), pages 381-392, June.
- John G. Riley & William Samuelson, 1979. "Optimal Auctions," UCLA Economics Working Papers 152, UCLA Department of Economics.
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- Nicolás Figueroa & Vasiliki Skreta, 2007. "The Role of Outside Options in Auction Design," Documentos de Trabajo 231, Centro de Economía Aplicada, Universidad de Chile.
- Vasiliki Skreta & Nicolas Figueroa, 2008. "The Role of Outside Options in Auction Design," Working Papers 08-12, New York University, Leonard N. Stern School of Business, Department of Economics.
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