Efficient Design with Interdependent Valuations

Dynamic Mechanism Design with Interdependent Valuations

We consider an infinite horizon dynamic mechanism design problem with interdependent valuations. In this setting the type of each agent is assumed to be evolving according to a first order Markov process and is independent of the types of other agents. However, the valuation of an agent can depend on the types of other agents, which makes the problem fall into an interdependent valuation settin...

Interim Efficient Mechanism Design with Interdependent Valuations

We consider the class of Bayesian environments with one-dimensional private signals and interdependent valuations. For these environments, we fully characterize the set of interim efficient mechanisms which satisfy interim incentive compatibility and interim individual rationality constraints. In these mechanisms, the allocation rules assign probability one to an alternative that maximizes the ...

Mechanism Design with Interdependent Valuations: E±ciency and Full Surplus Extraction

Agents' valuations are interdependent if they depend on the signals, or types, of all agents. Previous literature has implicitly assumed that agents cannot observe their payo®s from a decision and has shown that with interdependent valuations and independent signals e±cient design is impossible. This paper shows that if an agent observes his own decision payo®, then it is always possible to ̄nd...

Supplement to “efficient Dynamic Mechanisms in Environments with Interdependent Valuations: the Role of Contingent Transfers”

An experimental analysis of auctions with interdependent valuations

We study experiments in an auction setting with interdependent valuation. Groups of three players receive private signals and then bid for a single, indivisible item. Valuations for the item differ within groups and depend asymmetrically on a bidder’s own and other bidders’ signals. Theoretically, the English auction yields efficient allocations, while other standard auction formats fail to do ...

A Strict Ex-post Incentive Compatible Mechanism for Interdependent Valuations

The impossibility result by Jehiel and Moldovanu says that in a setting with interdependent valuations, any efficient and ex-post incentive compatible mechanism must be a constant mechanism. Mezzetti circumvents this problem by designing a two stage mechanism where the decision of allocation and payment are split over the two stages. This mechanism is elegant, however keeps a major weakness. In...