## Efficient mechanism design (1998)

Citations: | 30 - 0 self |

### BibTeX

@TECHREPORT{Krishna98efficientmechanism,

author = {Vijay Krishna and Motty Perry},

title = {Efficient mechanism design},

institution = {},

year = {1998}

}

### Years of Citing Articles

### OpenURL

### Abstract

We study Bayesian mechanism design in situations where agents ’ information may be multi-dimensional, concentrating on mechanisms that lead to efficient allocations. Our main result is that a generalization of the well-known Vickrey-Clarke-Groves mechanism maximizes the planner’s “revenue ” among all efficient mechanisms. This result is then used to study multiple object auctions in situations where bidders have privately known “demand curves” and extended to include situations with complementarities across objects or externalities across bidders. We also illustrate how the main result may be used to analyze the possibility of allocating both private and public goods ef-Þciently when budget balance considerations are important. The generalized VCG mechanism, therefore, serves to unify many results in mechansim design theory. 1

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Citation Context ...sociated expected payoff function for agent 2 is: U ∗ 2 (t2) = 1 6 t2 2. 20sSecond, consider a mechanism (κ∗ ,µ) which is the same as a second-price auction except that if agent 2 reports a type t2 ∈ =-=[2, 3]-=- , he pays an amount 1 (as an “entry 6 fee”) regardless of whether he wins the auction or not. The mechanism (κ∗ ,µ) is also incentive compatible and individually rational (but note that truth-telling... |

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Citation Context ...an important role in Lemma 1. Example 2: Suppose that there is an auction of a single object to two agents. Let the types indicate the value that each agent assigns to the object and suppose that T1 ==-=[0, 3]-=- whereas T2 =[0, 1]∪[2, 3] . Let the types be uniformly distributed over T1 and T2. First, consider the VCG mechanism (κ ∗ ,µ ∗ ) (which in this environment is the same as a second-price auction). It ... |

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There are other technical differences between Williams
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(Show Context)
Citation Context ...tives be K = {1, 2} where k = 1 denotes that there is no trade and the seller keeps the good whereas k = 2 denotes that there is trade and the buyer gets the object. The seller’s set of types is T1 = =-=[0, 1]-=- × {0} and the buyer’s set of types is T2 = {0} × [0, 1] . A seller of type t1 will not participate unless he gets at least his payoff from no trade and thus IR1 (t1) = t1 (1) . For the buyer IR2 (t2)... |