Optimal Deterministic Mechanism Design: Type-Independent Preference Orderings

Hitoshi Matsushima

The Japanese Economic Review, 2018, vol. 69, issue 4, No 1, 363-373

Abstract: Abstract We investigate revenue maximisation in general allocation problems with incomplete information, where we assume quasi-linearity, private values, independent type distributions and single-dimensionality of type spaces. We require a mechanism to be deterministic, strategy-proof and ex-post individually rational. We assume that each player has a type-independent preference ordering over deterministic allocations. We show that the Myerson’s technique to solve the incentive-constrained revenue maximisation problem in single-unit auctions can be applied to general allocation problems, where the incentive-constrained revenue maximisation problem can be reduced to the simple maximisation problem of the sum of players’ virtual valuations without imposing any incentive constraint.

Keywords: D44; D61; D82 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1111/jere.12176

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