Optimal allocation mechanisms with type-dependent negative externalities

Isabelle Brocas

Theory and Decision, 2013, vol. 75, issue 3, 359-387

Abstract: I analyze optimal auction design in the presence of linear type-dependent negative externalities. I characterize the properties of the optimal mechanism when externalities are “strongly decreasing” and “increasing” in the agent’s valuation and I discuss its implementation with sealed-bid auctions. Interestingly, bidding strategies are not necessarily increasing in valuations, and the optimal mechanism can be implemented by setting a price ceiling instead of a reserve price. Copyright Springer Science+Business Media New York 2013

Keywords: Auctions; Type-dependent externalities; Mechanism design; D44; D62 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (11)

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DOI: 10.1007/s11238-012-9345-0

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