Information Requirements for Mechanism Design

Richard McLean and Andrew Postlewaite
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Richard McLean: Rutgers University

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

Abstract: Standard mechanism design begins with a statement of the problem, including knowledge on the designer's part about the distribution of the characteristics (preferences and information) of the participants who are to engage with the mechanism. There is a large literature on robust mechanism design, much of which aims to reduce the assumed information the designer has about the participants. In this paper we provide an auction mechanism that reduces the assumed information assumed of the seller, and, in addition, relaxes substantially the assumed information of the participants. In particular, the mechanism performs well when there are many buyers, even though there is no prior distribution over the accuracy of buyers' information on the part of the designer or the participants.

Keywords: Robustness; Optimal auctions; Incentive Compatibility; Mechanism Design; Interdependent Values; Informational Size; Common Knowledge (search for similar items in EconPapers)
JEL-codes: C70 D44 D60 D82 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2024-10-31
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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