IDEAS home Printed from https://ideas.repec.org/p/nwu/cmsems/1100.html
   My bibliography  Save this paper

A Characterization of Efficient

Author

Listed:
  • Steven R. Williams

Abstract

A mechanism that is both efficient and incentive compatible in the Bayesian-Nash sense is shown to be payoff-equilvalent to a Groves mechanism at the point in time when each agent has just acquired his private information. This equilvalence result simplifies the question of whether or not an efficient, Bayesian incentive compatible mechanism can satisfy other desired objectives, for the search for an appropriate mechanism can be restricted to the family of Groves mechanisms. The method is used to extend a result of Myerson and Satterthwaite on the inefficiency of bilateral bargaining to multilateral setting.

Suggested Citation

  • Steven R. Williams, 1994. "A Characterization of Efficient," Discussion Papers 1100, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1100
    as

    Download full text from publisher

    File URL: http://www.kellogg.northwestern.edu/research/math/papers/1100.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Holmstrom, Bengt & Myerson, Roger B, 1983. "Efficient and Durable Decision Rules with Incomplete Information," Econometrica, Econometric Society, vol. 51(6), pages 1799-1819, November.
    2. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, vol. 85(3), pages 291-303, June.
    3. Green, Jerry & Laffont, Jean-Jacques, 1977. "Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods," Econometrica, Econometric Society, vol. 45(2), pages 427-438, March.
    4. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
    5. Bergstrom, Theodore C & Cornes, Richard C, 1983. "Independence of Allocative Efficiency from Distribution in the Theory of Public Goods," Econometrica, Econometric Society, vol. 51(6), pages 1753-1765, November.
    6. Edward Clarke, 1971. "Multipart pricing of public goods," Public Choice, Springer, vol. 11(1), pages 17-33, September.
    7. Makowski Louis & Mezzetti Claudio, 1993. "The Possibility of Efficient Mechanisms for Trading an Indivisible Object," Journal of Economic Theory, Elsevier, vol. 59(2), pages 451-465, April.
    8. Green, Jerry & Laffont, Jean-Jacques, 1977. "On the revelation of preferences for public goods," Journal of Public Economics, Elsevier, vol. 8(1), pages 79-93, August.
    9. McAfee, R. Preston, 1991. "Efficient allocation with continuous quantities," Journal of Economic Theory, Elsevier, vol. 53(1), pages 51-74, February.
    10. Rustichini, Aldo & Satterthwaite, Mark A & Williams, Steven R, 1994. "Convergence to Efficiency in a Simple Market with Incomplete Information," Econometrica, Econometric Society, vol. 62(5), pages 1041-1063, September.
    11. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
    12. Cremer, Jacques & McLean, Richard P, 1988. "Full Extraction of the Surplus in Bayesian and Dominant Strategy Auctions," Econometrica, Econometric Society, vol. 56(6), pages 1247-1257, November.
    13. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-631, July.
    14. McAfee, R Preston & Reny, Philip J, 1992. "Correlated Information and Mechanism Design," Econometrica, Econometric Society, vol. 60(2), pages 395-421, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Philippe Jehiel & Benny Moldovanu, 2001. "A note of revenue maximization and efficiency in multi-object auctions," Economics Bulletin, AccessEcon, vol. 3(2), pages 1-5.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simon Loertscher & Leslie M. Marx, 2022. "Incomplete Information Bargaining with Applications to Mergers, Investment, and Vertical Integration," American Economic Review, American Economic Association, vol. 112(2), pages 616-649, February.
    2. Vijay Krishna & Motty Perry, 1997. "Efficient Mechanism Design," Game Theory and Information 9703010, University Library of Munich, Germany, revised 28 Apr 1998.
    3. Delacrétaz, David & Loertscher, Simon & Marx, Leslie M. & Wilkening, Tom, 2019. "Two-sided allocation problems, decomposability, and the impossibility of efficient trade," Journal of Economic Theory, Elsevier, vol. 179(C), pages 416-454.
    4. Dilip Mookherjee, 2008. "The 2007 Nobel Memorial Prize in Mechanism Design Theory," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(2), pages 237-260, June.
    5. Sarkar, Soumendu, 2018. "Convergence of VCG mechanism to ex-post budget balance in a model of land acquisition," Mathematical Social Sciences, Elsevier, vol. 93(C), pages 37-46.
    6. Song, Yangwei, 2018. "Efficient Implementation with Interdependent Valuations and Maxmin Agents," Rationality and Competition Discussion Paper Series 92, CRC TRR 190 Rationality and Competition.
    7. repec:cte:werepe:we081207 is not listed on IDEAS
    8. Matsushima, Hitoshi & Noda, Shunya, 2023. "Mechanism design with general ex-ante investments," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    9. Claude d'Aspremont & Jacques Crémer & Louis-André Gérard-Varet, 2003. "Correlation, independence, and Bayesian incentives," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 21(2), pages 281-310, October.
    10. Matthias Lang, 2020. "Mechanism Design with Narratives," CESifo Working Paper Series 8502, CESifo.
    11. Miller, Nolan H. & Pratt, John W. & Zeckhauser, Richard J. & Johnson, Scott, 2007. "Mechanism design with multidimensional, continuous types and interdependent valuations," Journal of Economic Theory, Elsevier, vol. 136(1), pages 476-496, September.
    12. Hu Lu & Jacques Robert, 2000. "Optimal Trading Mechanisms with Ex Ante Unidentified Traders," Econometric Society World Congress 2000 Contributed Papers 1612, Econometric Society.
    13. Kuzmics, Christoph & Steg, Jan-Henrik, 2017. "On public good provision mechanisms with dominant strategies and balanced budget," Journal of Economic Theory, Elsevier, vol. 170(C), pages 56-69.
    14. Lu, Hu & Robert, Jacques, 2001. "Optimal Trading Mechanisms with Ex Ante Unidentified Traders," Journal of Economic Theory, Elsevier, vol. 97(1), pages 50-80, March.
    15. Emmanuelle Auriol & Robert Gary-Bobo, 2007. "On Robust Constitution Design," Theory and Decision, Springer, vol. 62(3), pages 241-279, May.
    16. Simon Loertscher & Leslie M. Marx, 2022. "To sell public or private goods," Review of Economic Design, Springer;Society for Economic Design, vol. 26(3), pages 385-415, September.
    17. Guo, Mingyu & Conitzer, Vincent, 2009. "Worst-case optimal redistribution of VCG payments in multi-unit auctions," Games and Economic Behavior, Elsevier, vol. 67(1), pages 69-98, September.
    18. Johnson, Scott & Miller, Nolan & Pratt, John W. & Zeckhauser, Richard, 2003. "Efficient Design with Multidimensional, Continuous Types, and Interdependent Valuations," Working Paper Series rwp03-020, Harvard University, John F. Kennedy School of Government.
    19. Song, Yangwei, 2018. "Efficient implementation with interdependent valuations and maxmin agents," Journal of Economic Theory, Elsevier, vol. 176(C), pages 693-726.
    20. Eric Maskin, 2004. "The Unity of Auction Theory: Paul Milgrom's Masterclass," Economics Working Papers 0044, Institute for Advanced Study, School of Social Science.
    21. Ausubel, Lawerence M. & Cramton, Peter, 1998. "The optimality of being efficient : designing auctions," Policy Research Working Paper Series 1985, The World Bank.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nwu:cmsems:1100. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fran Walker (email available below). General contact details of provider: https://edirc.repec.org/data/cmnwuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.