We investigate the issue of implementation via individually rational ex-post budget-balanced Bayesian mechanisms. We demonstrate that all social choice rules that generate a nonnegative ex-ante surplus, including ex-post efficient ones, can generically be implemented via such mechanisms. The...

Search engines commonly use “sponsored linksâ€, where certain advertisers’ links are promoted to be placed above others in return for monetary payment. It is natural to assume that all providers value a higher ranked placement more than lower ranked ones. Then how should the...

We develop a model of consulting (advising) where the role of the consultant is that she can reveal signals to her client which refine the client’s original private estimate of the profitability of a project. Importantly, only the client can observe or evaluate these signals...

In this paper, we study efficient dissolution of partnerships in a context of incomplete information. We generalize the results of Cramton, Gibbons and Klemperer (1987) to situations where the partnership takes on a common value that may depend upon all partners' types, so that each partner's...

In this paper we characterize the optimal allocation mechanism for $N$ objects, (permits), to $I$ potential buyers, (firms). Firms' payoffs depend on their costs, the costs of competitors and on the final allocation of the permits, allowing for externalities, substitutabilities and...

Wilson (1987) criticizes the existing literature of game theory as relying too much on common-knowledge assumptions. In reaction to Wilson's critique, the recent literature of mechanism design has started to employ stronger solution concepts such as dominant strategy incentive compatibility, and...

In its standard “public choice” form, the mechanism-design framework abstracts from institutional and technological constraints beyond those that the modeler can represent in the definition of states, outcomes, and preferences. This abstraction can create a useful simplification. However,...

A crucial assumption in the optimal auction literature has been that each bidder's valuation is known to be drawn from a single unique distribution. In this paper we relax this assumption and study the optimal auction problem when there is ambiguity about the distribution from which these...

When a partnership comes to an end partners have to determine the terms of the dissolution. A well known way to do so is by enforcing a buy/sell option. Under its rules one partner has to offer a price for the partnership and the other agent can choose whether she wants to sell her share or buy...

We analyze the problem of a seller who has multiple units of a good and faces a set of buyers with unit demands, private information, and identity-dependent externalities. We derive the seller's optimal mechanism and characterize its main properties. As an application of the model, we consider...