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On the Characterization of Incentive Compatible Mechanisms in General Quasi-linear Environments

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  • Yu Chen

    (Indiana University)

Abstract

This paper generalizes the Myerson (1981)'s characterization results of incentive compatible mechanisms and optimal incentive compatible mechanisms in general quasi-linear multi-agency situations with more abstract payoff function forms and constraint sets. Both Bayesian implementation and ex post implementation are addressed. In this paper the characterization results are also applied to comparison and equivalence between EPIC and BIC mechanisms, strategic dominance of centralized mechanisms over decentralized menus, and optimal (full) surplus extraction.

Suggested Citation

  • Yu Chen, 2014. "On the Characterization of Incentive Compatible Mechanisms in General Quasi-linear Environments," CAEPR Working Papers 2014-001, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
    • Handle: RePEc:inu:caeprp:2014001
    as

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    File URL: https://caepr.indiana.edu/RePEc/inu/caeprp/caepr2014-001.pdf
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    References listed on IDEAS

    as
    1. repec:inu:caeprp:2012-008 is not listed on IDEAS
    2. Mookherjee, Dilip & Reichelstein, Stefan, 1992. "Dominant strategy implementation of Bayesian incentive compatible allocation rules," Journal of Economic Theory, Elsevier, vol. 56(2), pages 378-399, April.
    3. Paul Milgrom & Ilya Segal, 2002. "Envelope Theorems for Arbitrary Choice Sets," Econometrica, Econometric Society, vol. 70(2), pages 583-601, March.
    4. Alejandro M. Manelli & Daniel R. Vincent, 2010. "Bayesian and Dominant‐Strategy Implementation in the Independent Private‐Values Model," Econometrica, Econometric Society, vol. 78(6), pages 1905-1938, November.
    5. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bayesian incentive compatible mechanism; ex post incentive compatible mechanism; quasi-linear environment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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