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.
References listed on IDEAS
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- Riley, John G & Samuelson, William F, 1981.
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