Efficient Design with Interdependent Valuations
We study efficient, Bayes-Nash incentive compatible mechanisms in a social choice setting that allows for informational and allocative externalities. We show that such mechanisms exist only if a congruence condition relating private and social rates of information substitution is satisfied. If signals are multidimensional, the congruence condition is determined by an integrability constraint, and it can hold only in non-generic cases such as the private value case or the symmetric case. If signals are one-dimensional, the congruence condition reduces to a monotonicity constraint and it can be generically satisfied. We apply the results to the study of multi-object auctions, and we discuss why such auctions cannot be reduced to one-dimensional models without loss of generality.
|Date of creation:||13 Jul 1999|
|Date of revision:|
|Note:||An earlier version (january 1998) of this paper was circulated as SFB 504 discussion paper 98-22. We wish to thank Olivier Compte, Eric Maskin, Paul Milgrom, Tim Van Zandt and Asher Wolinsky for very valuable remarks. Andy Postlewaite and two anonymous referees made comments that greatly improved the quality of the exposition. We also wish to thank seminar audiences at Basel, Berkeley, Boston, Frankfurt, Harvard, L.S.E., Mannheim, Michigan, MIT, Northwestern, Penn, Stanford, U.C.L., Wisconsin, and Yale for numerous comments. Financial Support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.|
|Contact details of provider:|| Postal: |
Phone: (49) (0) 621-292-2547
Fax: (49) (0) 621-292-5594
Web page: http://www.sfb504.uni-mannheim.de/Email:
More information through EDIRC
Web page: http://www.sfb504.uni-mannheim.de
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jehiel, Philippe & Moldovanu, Benny & Stacchetti, Ennio, 1996.
"How (Not) to Sell Nuclear Weapons,"
American Economic Review,
American Economic Association, vol. 86(4), pages 814-29, September.
- Gresik, Thomas A., 1991. "Ex ante incentive efficient trading mechanisms without the private valuation restriction," Journal of Economic Theory, Elsevier, vol. 55(1), pages 41-63, October.
When requesting a correction, please mention this item's handle: RePEc:xrs:sfbmaa:99-74. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carsten Schmidt)The email address of this maintainer does not seem to be valid anymore. Please ask Carsten Schmidt to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.