Efficient Mechanisms with Information Acquisition

Yunan Li ()
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Yunan Li: Department of Economics and Finance, City University of Hong Kong

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: This paper studies the design of ex ante efficient mechanisms in situations where a single item is for sale, and agents have positively interdependent values and can covertly acquire information at a cost before participating in a mechanism. I find that when interdependency is low and/or the number of agents is large, the ex post efficient mechanism is also ex ante efficient. In cases of high interdependency and/or a small number of agents, ex ante efficient mechanisms discourage agents from acquiring excessive information by introducing randomization to the ex post efficient allocation rule in areas where the information’s precision increases most rapidly.

Keywords: Auctions; Mechanism Design; Information Acquisition; Efficiency (search for similar items in EconPapers)
JEL-codes: C70 D44 D82 D86 (search for similar items in EconPapers)
Pages: 88 pages
Date: 2017-06-23, Revised 2017-06-23
New Economics Papers: this item is included in nep-des and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:16-007

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