Optimal auctions with multidimensional types and the desirability of exclusion
Within the context of a single-unit, independent private values auction model, we show that if bidder types are multidimensional, then under the optimal auction exclusion of some bidder types will occur. A second contribution of the paper is methodological in nature. In particular, we identify conditions under which an auction model with multidimensional types can be reduced to a model with one dimensional types without loss of generality. Reduction results of this type have achieved the status of folklore in the mechanism design literature. Here, we provide a proof of the reduction result for auctions.
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- Paulo Barelli & Suren Basov & Mauricio Bugarin & Ian King, 2012.
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RCER Working Papers
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Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(3), pages 497-507, September.
- Monteiro, P. K., 2007. "Abstract types and distributions in independent private value auctions," Economics Working Papers (Ensaios Economicos da EPGE) 643, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
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