A Modied English Auction for an Informed Buyer
نویسنده
چکیده
We consider a general Informed Principal Problem in the context of procurement. Both the potential suppliers and the buyer hold some private information: each supplier knows his cost of production, the buyer knows how much each suppliers product ts her technical requirements. We derive the optimal auction in this environment, and analyze the implementation problem with special emphasis on three aspects that are particularly relevant in real practice: privacy protection, dynamic consistency, and simplicity. We design a dynamic mechanism, the Modi ed English Auction, that implements the optimal auction outcome, is privacy preserving, dynamically consistent, and simple.
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