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 multi-dimensional, the congruence condition is determined by an integrability constraint, and it can hold only in nongeneric cases where values are private or a certain symmetry assumption holds. 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.
Year of publication: |
2001
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Authors: | Jehiel, Philippe ; Moldovanu, Benny |
Published in: |
Econometrica. - Econometric Society. - Vol. 69.2001, 5, p. 1237-59
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Publisher: |
Econometric Society |
Saved in:
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