Extremal incentive compatible transfers

Nenad Kos and Matthias Messner

Journal of Economic Theory, 2013, vol. 148, issue 1, 134-164

Abstract: We characterize the boundaries of the set of transfers (extremal transfers) implementing a given allocation rule without imposing any assumptions on the agentʼs type space or utility function besides quasi-linearity. Exploiting the concept of extremal transfers allows us to obtain an exact characterization of the set of implementable allocation rules (the set of transfers is non-empty) and the set of allocation rules satisfying Revenue Equivalence (the extremal transfers coincide). We then show how the extremal transfers can be put to use in mechanism design problems where Revenue Equivalence does not hold.

Keywords: Incentive compatibility; Revenue Equivalence; Budget balance; Mechanism design (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Extremal Incentive Compatible Transfers (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:148:y:2013:i:1:p:134-164

DOI: 10.1016/j.jet.2012.09.012

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