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Efficient Auctions and Interdependent Types

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Abstract

We consider the efficient allocation of a single good with interdependent values in a quasi-linear environment. We present an approach to modelling interdependent preferences distinguishing between "payoff types" and "belief types" and report a characterization of when the efficient allocation can be partially Bayesian implemented on a finite type space. The characterization can be used to unify a number of sufficient conditions for efficient partial implementation in this classical auction setting. We report how a canonical language for discussing interdependent types -- developed in a more general setting by Bergemann, Morris and Takahashi (2011) -- applies in this setting and note by example that this canonical language will not allow us to distinguish some types in the payoff type -- belief type language.

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  • Dirk Bergemann & Stephen Morris & Satoru Takahashi, 2012. "Efficient Auctions and Interdependent Types," Cowles Foundation Discussion Papers 1846, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:1846
    Note: CFP 1360
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    1. Neeman, Zvika, 2004. "The relevance of private information in mechanism design," Journal of Economic Theory, Elsevier, vol. 117(1), pages 55-77, July.
    2. Richard McLean & Andrew Postlewaite, 2004. "Informational Size and Efficient Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(3), pages 809-827.
    3. Dirk Bergemann & Stephen Morris, 2012. "Robust Implementation in Direct Mechanisms," World Scientific Book Chapters, in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 4, pages 153-194, World Scientific Publishing Co. Pte. Ltd..
    4. Bergemann, Dirk & Morris, Stephen & Takahashi, Satoru, 2017. "Interdependent preferences and strategic distinguishability," Journal of Economic Theory, Elsevier, vol. 168(C), pages 329-371.
    5. Yi‐Chun Chen & Siyang Xiong, 2013. "Genericity and Robustness of Full Surplus Extraction," Econometrica, Econometric Society, vol. 81(2), pages 825-847, March.
    6. Dirk Bergemann & Stephen Morris, 2012. "Robust Mechanism Design:The Role of Private Information and Higher Order Beliefs," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 8318, December.
    7. Dirk Bergemann & Stephen Morris, 2012. "Robust Mechanism Design," World Scientific Book Chapters, in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 2, pages 49-96, World Scientific Publishing Co. Pte. Ltd..
    8. Aviad Heifetz & Zvika Neeman, 2006. "On the Generic (Im)Possibility of Full Surplus Extraction in Mechanism Design," Econometrica, Econometric Society, vol. 74(1), pages 213-233, January.
    9. John C. Harsanyi, 1968. "Games with Incomplete Information Played by "Bayesian" Players Part II. Bayesian Equilibrium Points," Management Science, INFORMS, vol. 14(5), pages 320-334, January.
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    11. repec:hal:pseose:hal-00813046 is not listed on IDEAS
    12. Jehiel, Philippe & Meyer-ter-Vehn, Moritz & Moldovanu, Benny, 2012. "Locally robust implementation and its limits," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2439-2452.
    13. Cremer, Jacques & McLean, Richard P, 1985. "Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent," Econometrica, Econometric Society, vol. 53(2), pages 345-361, March.
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    18. Rochet, Jean-Charles, 1987. "A necessary and sufficient condition for rationalizability in a quasi-linear context," Journal of Mathematical Economics, Elsevier, vol. 16(2), pages 191-200, April.
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    Cited by:

    1. Guo, Huiyi, 2019. "Mechanism design with ambiguous transfers: An analysis in finite dimensional naive type spaces," Journal of Economic Theory, Elsevier, vol. 183(C), pages 76-105.
    2. Takashi Kamihigashi, 2023. "The 2022 Japanese Economic Association Nakahara prize recipient: Professor Satoru Takahashi, National University of Singapore," The Japanese Economic Review, Springer, vol. 74(3), pages 355-356, July.
    3. Farinha Luz, Vitor, 2013. "Surplus extraction with rich type spaces," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2749-2762.

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    More about this item

    Keywords

    Mechanism Design; Robust mechanism design; Efficient auctions; Interdepedent types; Partial implementation; Full implementation;
    All these keywords.

    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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