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Ex-post implementation with interdependent values

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  • Goyal, Saurav
  • Narayanan, Aroon

Abstract

We characterize ex-post implementable allocation rules for single object auctions under quasi-linear preferences with interdependent value functions. We show that requiring ex-post implementability is equivalent to requiring a weakening of monotonicity, which is a familiar condition used to characterize dominant strategy implementation. We illustrate that non-monotone rules may be necessary to achieve objectives such as efficiency and revenue maximizations, even in standard models such as the maximum signal model studied in Bulow and Klemperer (2002), and Bergemann et al. (2020).

Suggested Citation

  • Goyal, Saurav & Narayanan, Aroon, 2023. "Ex-post implementation with interdependent values," Games and Economic Behavior, Elsevier, vol. 142(C), pages 440-453.
  • Handle: RePEc:eee:gamebe:v:142:y:2023:i:c:p:440-453
    DOI: 10.1016/j.geb.2023.09.002
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    References listed on IDEAS

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    1. Bergemann, Dirk & Brooks, Benjamin & Morris, Stephen, 2020. "Countering the winner's curse: optimal auction design in a common value model," Theoretical Economics, Econometric Society, vol. 15(4), November.
    2. Jeremy Bulow & Paul Klemperer, 2002. "Prices and the Winner's Curse," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 1-21, Spring.
    3. Jehiel, Philippe & Moldovanu, Benny, 2001. "Efficient Design with Interdependent Valuations," Econometrica, Econometric Society, vol. 69(5), pages 1237-1259, September.
    4. Ülkü, Levent, 2014. "Implementation in an interdependent value framework," Mathematical Social Sciences, Elsevier, vol. 68(C), pages 64-70.
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    6. Fieseler, Karsten & Kittsteiner, Thomas & Moldovanu, Benny, 2003. "Partnerships, lemons, and efficient trade," Journal of Economic Theory, Elsevier, vol. 113(2), pages 223-234, December.
    7. Lawrence Ausubel, 2000. "A Generalized Vickrey Auction," Econometric Society World Congress 2000 Contributed Papers 1257, Econometric Society.
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    9. Philippe Jehiel & Moritz Meyer-ter-Vehn & Benny Moldovanu & William R. Zame, 2006. "The Limits of ex post Implementation," Econometrica, Econometric Society, vol. 74(3), pages 585-610, May.
    10. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
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    More about this item

    Keywords

    Ex-post implementation; Interdependent value auction; Eventual monotonicity; Optimal auction;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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