Balanced ranking mechanisms

Debasis Mishra and Tridib Sharma

Discussion Papers from Indian Statistical Institute, Delhi

Abstract: In the private values single object auction model, we construct a satisfactory mechanism - a symmetric, dominant strategy incentive compatible, and budget-balanced mechanism. Our mechanism allocates the object to the highest valued agent with more than 99 probability provided there are at least 14 agents. It is also ex-post individually rational. We show that our mechanism is optimal in a restricted class of satisfactory ranking mechanisms. Since achieving efficiency through a dominant strategy incentive compatible and budget-balanced mechanism is impossible in this model, our results illustrate the limits of this impossibility.

Keywords: budget-balanced mechanisms; Green-Laffont mechanism; Pareto optimal mechanism (search for similar items in EconPapers)
JEL-codes: D02 D71 D82 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2016-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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