We showed in McLean and Postlewaite (2014) that when agents are informationally small, there exist small modifications to VCG mechanisms in interdependent value problems that restore incentive compatibility. This paper presents a two-stage mechanism that similarly restores incentive...

It is well-known that the ability of the Vickrey-Clarke-Groves (VCG) mechanism to implement efficient outcomes for private value choice problems does not extend to interdependent value problems. When an agent’s type affects other agents’ utilities, it may not be incentive compatible for him...

We prove the existence of a pure-strategy trembling-hand perfect equilibrium in upper semicontinuous potential games, and we show that generic potential games possess pure-strategy strictly perfect and essential equilibria. We also establish a more powerful result: the set of maximizers of an...

The recent ellipsoidal method for solving linear programs due to Khachian and Shor is shown to process linear complementarity problems with positive semidefinite matrix. Suitable modifications of all lemmas are presented and it is shown that the algorithm operates in polynomial time of the same...

In this paper, we provide axiomatic foundations for social choice rules on a domain of convex and comprehensive social choice problems when agents have cardinal utility functions. We translate the axioms of three well known approaches in bargaining theory (Nash 1950; Kalai and Smorodinsky 1975; Kalai...

This chapter surveys a class of solution concepts for n-person games without transferable utility -- NTU games for short -- that are based on varying notions of "fair division". An NTU game is a specification of payoffs attainable by members of each coalition through some joint course of action....

In this paper we consider the question of allocating costs and setting prices for customers in a variety of queuing systems. We will focus on the problem of setting users fees within an organization for a shared resource, such as a computer center. We argue that both the Aumann-Shapley pricing...