 Approximation in mechanism design with interdependent valuesYunan Li Games and Economic Behavior, 2017, vol. 103, issue C, 225-253 Abstract: This paper studies the revenue maximization problem in environments wherein buyers have interdependent values and correlated types. We show that (1) when the system of feasible sets is a matroid and buyer valuations satisfy a single-crossing condition, the generalized Vickrey–Clarke–Groves mechanisms with lazy reserves (VCG-L) are ex-post incentive compatible and ex-post individually rational; (2) if, in addition, the valuation distribution satisfies a generalized monotone hazard rate condition, the VCG-L mechanism with conditional monopoly reserves is approximately optimal. Then we construct an ascending auction that implements the truth-telling equilibrium of a VCG-L mechanism in ex-post equilibrium. Finally, we discuss the connection between the VCG-L mechanisms and greedy algorithms studied in Lehmann et al. (2002) and deferred-acceptance auctions studied in Milgrom and Segal (2014), and the impact of competition by proving a Bulow and Klemperer (1996) type result. Keywords: Mechanism design; Approximation; Interdependent values; Revenue maximization (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:103:y:2017:i:c:p:225-253 DOI: 10.1016/j.geb.2016.01.006 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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