Surplus extraction with rich type spaces

Vitor Farinha Luz

Journal of Economic Theory, 2013, vol. 148, issue 6, 2749-2762

Abstract: We characterize revenue maximizing mechanisms in auction settings with ‘rich’ type spaces, where bidders obtain information from sources other than their own valuation. By considering a relaxed problem, we provide an upper bound on revenue extraction that explicitly builds on the richness of the information structure. We provide a condition under which this upper bound is achieved and describe an optimal mechanism. Under this condition, we also show that the optimal revenue can be achieved through dominant strategy implementation.

Keywords: Surplus extraction; Information rents; Mechanism design; Private information; Correlated information; Partial implementation (search for similar items in EconPapers)
JEL-codes: C79 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 (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:148:y:2013:i:6:p:2749-2762

DOI: 10.1016/j.jet.2013.07.016

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