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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- Thanassoulis, John, 2004. "Haggling over substitutes," Journal of Economic Theory, Elsevier, vol. 117(2), pages 217-245, August.
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08-12, New York University, Leonard N. Stern School of Business, Department of Economics.
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- Lollivier, Stefan & Rochet, Jean-Charles, 1983. "Bunching and second-order conditions: A note on optimal tax theory," Journal of Economic Theory, Elsevier, vol. 31(2), pages 392-400, December.
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