Information Acquisition and Efficient Mechanism Design∗

We consider a general mechanism design setting where each agent can acquire (covert) information before participating in the mechanism. The central question is whether a mechanism exists which provides the efficient incentives for information acquisition ex ante and implements the efficient allocation conditional on the private information ex post. It is shown that in every private value environment the Vickrey-Clark-Groves mechanism guarantees both ex ante as well as ex post efficiency. In contrast, with common values, ex ante and ex post efficiency cannot be reconciled in general. Sufficient conditions in terms of suband supermodularity are provided when (all) ex post efficient mechanisms lead to private underor overacquisition of information.