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72
Auction Theory: A Guide to the Literature
 JOURNAL OF ECONOMIC SURVEYS
, 1999
"... This paper provides an elementary, nontechnical, survey of auction theory, by introducing and describing some of the critical papers in the subject. (The most important of these are reproduced in a companion book, The Economic Theory of Auctions, Paul Klemperer (ed.), Edward Elgar (pub.), forthco ..."
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Cited by 352 (3 self)
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This paper provides an elementary, nontechnical, survey of auction theory, by introducing and describing some of the critical papers in the subject. (The most important of these are reproduced in a companion book, The Economic Theory of Auctions, Paul Klemperer (ed.), Edward Elgar (pub.), forthcoming.) We begin with the most fundamental concepts, and then introduce the basic analysis of optimal auctions, the revenue equivalence theorem, and marginal revenues. Subsequent sections address riskaversion, affiliation, asymmetries, entry, collusion, multiunit auctions, double auctions, royalties, incentive contracts, and other topics. Appendices contain technical details, some simple worked examples, and a bibliography for each section.
Efficient Design with Interdependent Valuations

, 1996
"... We study efficient, BayesNash 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 signa ..."
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Cited by 80 (1 self)
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We study efficient, BayesNash 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 nongeneric cases such as the private value case or the symmetric case. If signals are onedimensional, the congruence condition reduces to a monotonicity constraint and it can be generically satisfied. We apply the results to the study of multiobject auctions, and we discuss why such auctions cannot be reduced to onedimensional models without loss of generality.
Eliciting Informative Feedback: The PeerPrediction Method
 Management Science
, 2005
"... informs ® doi 10.1287/mnsc.1050.0379 ..."
Robust mechanism design
 ECONOMETRICA
, 2005
"... The mechanism design literature assumes too much common knowledge of the environment among the players and planner. We relax this assumption by studying implementation on richer type spaces, with more higher order uncertainty. We study the "ex post equivalence" question: when is interim implementati ..."
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Cited by 54 (6 self)
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The mechanism design literature assumes too much common knowledge of the environment among the players and planner. We relax this assumption by studying implementation on richer type spaces, with more higher order uncertainty. We study the "ex post equivalence" question: when is interim implementation on all possible type spaces equivalent to requiring ex post implementation on the space of payoff types? We show that ex post equivalence holds when the social choice correspondence is a function and in simple quasilinear environments. When ex post equivalence holds, we identify how large the type space must be to obtain the equivalence. We also show that ex post equivalence fails in general, including in quasilinear environments with budget balance. For quasilinear environments, we provide an exact characterization of when interim implementation is possible in rich type spaces. In this environment, the planner can fully extract players’ belief types, so the incentive constraints reduce to conditions distinguishing types with the same beliefs about others’ types but different payoff types.
Overcoming incentive constraints by linking decisions, Econometrica
 McKelvey, R.D., Palfrey, T.R
, 2007
"... Consider an arbitrary Bayesian decision problem in which the preferences of each agent are private information. We prove that the utility costs associated with incentive constraints typically decrease when the decision problem is linked with independent copies of itself. This is established by first ..."
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Cited by 23 (0 self)
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Consider an arbitrary Bayesian decision problem in which the preferences of each agent are private information. We prove that the utility costs associated with incentive constraints typically decrease when the decision problem is linked with independent copies of itself. This is established by first defining a mechanism in which agents must budget their representations of preferences so that the frequency of preferences across problems mirrors the underlying distribution of preferences, and then arguing that agents will satisfy their budget by being as truthful as possible. Examples illustrate the disappearance of incentive costs when problems are linked in a rich variety of problems, including public goods allocation, voting, and bargaining.
Cartel Enforcement With Uncertainty About Costs
 International Economic Review
, 1990
"... this paper is to maximize producer surplus. If instead the cartel is formed and regulated by the government, then it seems likely that both producer and consumer surplus would be given positive weight in the objective function. An analysis of this problem would extend the work of Baron and Myerson ( ..."
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Cited by 20 (1 self)
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this paper is to maximize producer surplus. If instead the cartel is formed and regulated by the government, then it seems likely that both producer and consumer surplus would be given positive weight in the objective function. An analysis of this problem would extend the work of Baron and Myerson (1982) from one to several firms.
The price of simplicity
 IEEE Journal Selected Areas in Communications
, 2007
"... We study revenuemaximizing pricing by a service provider in a communication network and compare revenues from simple pricing rules to the maximum revenues that are feasible. In particular, we focus on flat entry fees as the simplest pricing rule. We provide a lower bound for the ratio between the r ..."
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Cited by 13 (0 self)
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We study revenuemaximizing pricing by a service provider in a communication network and compare revenues from simple pricing rules to the maximum revenues that are feasible. In particular, we focus on flat entry fees as the simplest pricing rule. We provide a lower bound for the ratio between the revenue from this pricing rule and maximum revenue, which we refer to as the Price of Simplicity. We characterize what types of environments lead to a low Price of Simplicity and show that in a range of environments, the loss of revenue from using simple entry fees is small. We then study the Price of Simplicity for a simple nonlinear pricing (price discrimination) scheme based on the Paris Metro Pricing. The service provider creates different service classes and charges differential entry fees for these classes. We show that the gain from this type of price discrimination is small, particularly in environments in which the simple entry fee pricing leads to a low Price of Simplicity. 1
Information structures in optimal auctions
 YALE UNIVERSITY
, 2001
"... A seller wishes to sell an object to one of multiple bidders. The valuations of the bidders are privately known. We consider the joint design problem in which the seller can decide the accuracy by which bidders learn their valuation and to whom to sell at what price. We establish that optimal inform ..."
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Cited by 12 (1 self)
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A seller wishes to sell an object to one of multiple bidders. The valuations of the bidders are privately known. We consider the joint design problem in which the seller can decide the accuracy by which bidders learn their valuation and to whom to sell at what price. We establish that optimal information structures in an optimal auction exhibit a number of properties: (i) information structures can be represented by monotone partitions, (ii) the cardinality of each partition is finite, (iii) the partitions are asymmetric across agents. These properties imply that the optimal selling strategy of a seller can be implemented by a sequence of exclusive takeit or leaveit offers.