Robust Mechanism Design of Exchange

Pasha Andreyanov and Tomasz Sadzik

The Review of Economic Studies, 2021, vol. 88, issue 2, 521-573

Abstract: In this article, we provide mechanisms for exchange economies with private information and interdependent values, which are ex post individually rational, incentive compatible, generate budget surplus, and are ex post nearly efficient, with many agents. Our framework is entirely prior-free, and we make no symmetry restrictions. The mechanisms can be implemented using a novel discriminatory conditional double auction, without knowledge of information structure or utility functions. We also show that no other mechanism satisfying the constraints can generate inefficiency of smaller order.

Keywords: Exchange economy; Asymptotic efficiency; Interdependent values; Prior-free mechanisms; Robustness; D44; D47; D82 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:88:y:2021:i:2:p:521-573.

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