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A general characterization of interim efficient mechanisms for independent linear environments

Ledyard, John O. and Palfrey, Thomas R. (2007) A general characterization of interim efficient mechanisms for independent linear environments. Journal of Economic Theory, 133 (1). pp. 441-466. ISSN 0022-0531. doi:10.1016/j.jet.2005.12.006. https://resolver.caltech.edu/CaltechAUTHORS:20100924-090411858

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Abstract

We consider the class of Bayesian environments with independent types, and utility functions which are both quasi-linear in a private good and linear in a one-dimensional private-value type parameter. We call these independent linear environments. For these environments, we fully characterize interim efficient allocation rules which satisfy interim incentive compatibility and interim individual rationality constraints. We also prove that they correspond to decision rules based on virtual surplus maximization, together with the appropriate incentive taxes. We illustrate these techniques with applications to auction design and public good provision.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1016/j.jet.2005.12.006 DOIUNSPECIFIED
ORCID:
AuthorORCID
Palfrey, Thomas R.0000-0003-0769-8109
Additional Information:© 2006 Elsevier. Received 19 November 2003; revised 1 December 2005. Available online 2 March 2006. The financial support of the National Science Foundation is gratefully acknowledged, grants SES-0079301 and ITR/AP SES-0121478. This is a revised version of a lecture presented at the CORE Conference in Memory of Louis-André Gérard-Varet, January, 2003. Earlier versions were presented at Northwestern University and the 1999 Midwest Mathematical Economics meeting at University of Illinois. We thank seminar participants and two referees for comments, and are grateful to Gregory Pavlov for finding an error in an earlier version of the paper.
Funders:
Funding AgencyGrant Number
NSFSES-0079301
NSFITR/AP SES-0121478
Subject Keywords:Public goods; Mechanism design; Interim efficiency; Incentive compatibility; Private values
Issue or Number:1
Classification Code:JEL classification codes: 024; 026
DOI:10.1016/j.jet.2005.12.006
Record Number:CaltechAUTHORS:20100924-090411858
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20100924-090411858
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:20120
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:24 Sep 2010 18:35
Last Modified:08 Nov 2021 23:57

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