A characterization of efficient, bayesian incentive compatible mechanisms

Steven R. Williams ()
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Steven R. Williams: Department of Economics, University of Illinois, Champaign, IL 61820, USA

Economic Theory, 1999, vol. 14, issue 1, 155-180

Abstract: A mechanism that is both efficient and incentive compatible in the Bayesian-Nash sense is shown to be payoff-equivalent to a Groves mechanism at the point in time when each agent has just acquired his private information. This equivalence result simplifies the question of whether or not an efficient, Bayesian incentive compatible mechanism can satisfy other desired objectives, for the search for an appropriate mechanism can be restricted to the family of Groves mechanisms. The method is used to extend the result of Myerson and Satterthwaite on the inefficiency of bilateral bargaining to a multilateral setting.

JEL-codes: C72 C78 D82 (search for similar items in EconPapers)
Date: 1999-07-08
Note: Received: June 30, 1997; revised version: May 22, 1998
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Citations: View citations in EconPapers (104)

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