Implementation with Interdependent Valuations PRELIMINARY AND INCOMPLETE
نویسنده
چکیده
There is a large literature aimed at characterizing the social choice functions that can be implemented in Bayes Nash equilibria. This literature typically takes agentsinformation as exogenously given and xed throughout the analysis. While for some problems this may be appropriate, the assumption is problematic for others. A typical analysis, relying on the revelation principle, maximizes some objective function subject to truthful revelation being a Bayes equilibrium. It is often the case that truthful revelation is not ex post incentive compatible, that is, for a given agent, there are some vectors of the other agentstypes for which the agent may be better o¤ by misreporting his type than truthfully revealing it. Truthful revelation, of course, may still be a Bayes equilibrium, because agents announce their types without knowing other agents types: choices must be made on the basis of their beliefs about other agentstypes. The di¢ culty with assuming that agentsinformation is exogenous is that when truthful revelation is not ex post incentive compatible, agents have incentives to learn other agentstypes. To the extent that an agent can, at some cost, learn something about other agents types, agentsbeliefs when a mechanism is applied must be treated as endogenous. A planner who designs a mechanism for which truthful revelation is ex post incentive compatible can legitimately ignore agentsincentives to engage in espionage to discover other agentstypes, and consequently, ex post incentive compatibility is desirable. The Clarke-Groves-Vickrey mechanism (hereafter CGV)1 for
منابع مشابه
A Race beyond the Bottom: The Nature of Bidding for a Firm
This paper studies a tax competition over a foreign firm that is to decide its production location. In addition to the sealed-bid first price auction, we consider the English auction under both complete and incomplete information as to competiting countries’ valuations of the firm, and show that countries may bid beyond their own valuations if their citizens own some shares of the firm. Prelimi...
متن کاملHeterogeneity in Decentralized Asset Markets∗
We consider a decentralized market for an asset (or durable good) where investors’ valuations are heterogeneous and drawn from an arbitrary distribution. We provide a full characterization of the equilibrium, in closed form, both in and out of steady state. We find that investors with moderate valuations tend to specialize in intermediation, so that a “core-periphery” trading network emerges en...
متن کاملDrop-out in Small and Large Contests
We study participation in contests with heterogeneous agents. For the all-pay auction with multiple (identical) prizes where contestants belong to group H or L; valuations (for the prizes) are independently and, within groups, identically distributed, we provide a sufficient condition for all L contestants to drop-out – always choose zero effort. The drop-out is possible even if there is some c...
متن کاملMultiunit Ascending Auctions with Costly Monitoring∗
This paper analyzes multiunit discriminatory open-cry ascending auctions in which bidders have limited opportunities to place bids throughout the auction and rival bidder activity is not continuously monitored. We characterize the theoretical properties of a Perfect Bayesian Equilibrium in which bids are increasing in valuations, analyze identification and develop a flexible estimation approach...
متن کامل