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VCG mechanisms and efficient ex ante investments with externalities

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  • Krahmer, Daniel
  • Strausz, Roland

Abstract

For mechanism design with independent values, we identify a subclass of Vickrey--Clarke--Groves (VCG) mechanisms that induce efficient ex ante investments even with externalities. The Vickrey second price auction does not belong to this class.
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  • Krahmer, Daniel & Strausz, Roland, 2007. "VCG mechanisms and efficient ex ante investments with externalities," Economics Letters, Elsevier, vol. 94(2), pages 192-196, February.
    • Handle: RePEc:eee:ecolet:v:94:y:2007:i:2:p:192-196
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    References listed on IDEAS

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    1. Leandro Arozamena & Estelle Cantillon, 2004. "Investment Incentives in Procurement Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(1), pages 1-18.
    2. Dirk Bergemann & Juuso Valimaki, 2002. "Information Acquisition and Efficient Mechanism Design," Econometrica, Econometric Society, vol. 70(3), pages 1007-1033, May.
    3. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, April.
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    Cited by:

    1. Hitoshi Matsushima & Shunya Noda, 2019. "Mechanism Design with General Ex-Ante Investments (Revised version of F415 )," CARF F-Series CARF-F-464, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    2. Fang Liu & Tracy R. Lewis & Jing-Sheng Song & Nataliya Kuribko, 2019. "Long-Term Partnership for Achieving Efficient Capacity Allocation," Operations Research, INFORMS, vol. 67(4), pages 984-1001, July.
    3. Münster, Johannes, 2006. "Contests with Investment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 120, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    4. Matsushima, Hitoshi & Noda, Shunya, 2023. "Mechanism design with general ex-ante investments," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    5. Münster, Johannes, 2006. "Contests with investment [Wettkämpfe mit Investitionen]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-09, WZB Berlin Social Science Center.
    6. Johannes Münster, 2007. "Contests with investment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(8), pages 849-862.

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