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Interim Efficient Mechanism Design with Interdependent Valuations

Kucuksenel, Serkan (2006) Interim Efficient Mechanism Design with Interdependent Valuations. Social Science Working Paper, 1254. California Institute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20170801-104202489

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Abstract

We consider the class of Bayesian environments with one-dimensional private signals and interdependent valuations. For these environments, we fully characterize the set of interim efficient mechanisms which satisfy interim incentive compatibility and interim individual rationality constraints. In these mechanisms, the allocation rules assign probability one to an alternative that maximizes the sum of all agents’ virtual valuations that are defined for these economic settings and transfer functions are defined depending on agents’ welfare weights. This set of mechanisms is compelling since interim efficient mechanisms are the best in the sense that there is no other incentive compatible and individually rational mechanism that is preferred by each agent.


Item Type:Report or Paper (Working Paper)
Additional Information:The author wishes to thank John Ledyard for helpful comments. All usual disclaimers apply.
Group:Social Science Working Papers
Subject Keywords:mechanism design, incentive compatibility, interdependent valuations, incentive efficiency
Classification Code:JEL: C72, D44, D61
Record Number:CaltechAUTHORS:20170801-104202489
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20170801-104202489
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79677
Collection:CaltechAUTHORS
Deposited By: Hanna Storlie
Deposited On:01 Aug 2017 20:18
Last Modified:01 Aug 2017 20:18

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