Information Acquisition and Efficient Mechanism Design
We consider a general mechanism design setting where each agent can acquire (covert) information before participating in the mechanism. The central question is whether a mechanism exists which provides the efficient incentives for information acquisition ex-ante and implements the efficient allocation conditional on the private information ex-post. It is shown that in every private value environment the Vickrey-Groves-Clark mechanism guarantees both ex-ante as well as ex-post efficiency. In contract, with common values, ex-ante and ex-post efficiency cannot be reconciled in general. Sufficient conditions in terms of sub- and supermodularity are provided when (all) ex-post efficient mechanisms lead to private under- or over-acquisition of information
|Date of creation:||Feb 2000|
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|Publication status:||Published in Econometrica (May 2002), 70(3): 1007-1033|
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