Optimal combinatorial mechanism design

Levent Ülkü ()

Economic Theory, 2013, vol. 53, issue 2, 473-498

Abstract: We consider an optimal mechanism design problem with several heterogenous objects and interdependent values. We characterize ex post incentives using an appropriate monotonicity condition and reformulate the problem in such a way that the choice of an allocation rule can be separated from the choice of the payment rule. Central to the analysis is the formulation of a regularity condition, which gives a recipe for the optimal mechanism. If the problem is regular, then an optimal mechanism can be obtained by solving a combinatorial allocation problem in which objects are allocated in a way to maximize the sum of virtual valuations. We identify conditions that imply regularity using the techniques of supermodular optimization. Copyright Springer-Verlag 2013

Keywords: Combinatorial mechanism design; Interdependent values; Supermodularity; Regularity; C70; D44; D60; D82 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Working Paper: Optimal Combinatorial Mechanism Design (2009)
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DOI: 10.1007/s00199-012-0700-8

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