Full surplus extraction and within-period ex post implementation in dynamic environments

Shunya Noda

Theoretical Economics, 2019, vol. 14, issue 1

Abstract: We study full surplus extraction and implementation in dynamic environments. We exploit intertemporal correlations of agents' types to construct within-period ex post incentive compatible mechanisms. First, we formulate one-shot environments, in which a single agent has a hidden type and the planner observes a public signal about the agent's type after a type-contingent allocation is chosen. We propose necessary and sufficient conditions for full surplus extraction (strong detectability) and for implementability of the targeted allocation rule (weak detectability) in this one-shot problem. We decompose the general dynamic problem into one-shot problems, and obtain sufficient conditions for surplus extraction and implementation.

Keywords: Dynamic mechanism design; perfect Bayesian equilibrium; revenue maximization; full surplus extraction (search for similar items in EconPapers)
JEL-codes: C73 D47 D82 D86 (search for similar items in EconPapers)
Date: 2019-01-30
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