Implementation with Interdependent Valuations
نویسنده
چکیده
It is well-known that the ability of the Vickrey-Clarke-Groves (VCG) mechanism to implement e¢ cient outcomes for private value choice problems does not extend to interdependent value problems. When an agents type a¤ects other agentsutilities, it may not be incentive compatible for him to truthfully reveal his type when faced with CGV payments. We show that when agents are informationally small, there exist small modi cations to CGV that restore incentive compatibility. We further show that truthful revelation is an approximate ex post equilibrium. Lastly, we show that in replicated settings aggregate payments su¤cient to induce truthful revelation go to zero. Keywords: Auctions, Incentive Compatibility, Mechanism Design, Interdependent Values, Ex Post Incentive Compatibility JEL Classi cations: C70, D44, D60, D82 We thank the National Science Foundation (grant SES-0095768) for nancial support. We also thank Stephen Morris, Marcin Peski and the participants of numberous presentations for helpful comments.
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