Robust Identification in Mechanisms

This paper develops identification results for the distribution of valuations in a class of allocation-transfer mechanisms. These mechanisms determine an allocation of units of a valuable object and arrangement of monetary transfers on the basis of the actions taken by the players. The identification strategy is based on the assumption of monotone equilibrium, in which players take actions that are weakly increasing functions of their valuations. Such equilibria are known from the economic theory literature to exist under general conditions on the mechanism. The identification results flexibly deliver either point identification or partial identification, as appropriate based on the identifying content of the data from the mechanism. The identification result is non-parametric, in the sense that it does not depend on parametric assumptions about the distribution of valuations. Moreover, the identification results can apply to an incomplete model that does not necessarily involve a complete specification of all of the details of the mechanism. Consequently, the identification results are necessarily robust to the details of the specification of the model and flexibly accommodate unique features of the mechanism in particular empirical applications. JEL codes: C57, D44, D82.