Optimal Auction Design With Common Values: An Informationally Robust Approach

A profit?maximizing seller has a single unit of good to sell. The bidders have pure common value that is drawn from distribution commonly known. does not know the bidders' beliefs about and thinks are designed adversarially by Nature minimize profit. We construct strong maxmin solution this joint mechanism design information problem, consisting mechanism, an structure, equilibrium, such neither nor can move profit in their respective preferred directions, even if deviator select new equilibrium. structure solve family minmax problems, regardless how equilibrium selected. takes form proportional auction : each bidder submits one?dimensional bid, aggregate allocation payment depend on individual allocations payments bids. report number additional properties mechanisms, including what happens as grows large robustness with respect prior over value.