Mechanism design without quasilinearity

Tomoya Kazumura (), Debasis Mishra and Shigehiro Serizawa

Theoretical Economics, 2020, vol. 15, issue 2

Abstract: This paper studies a model of mechanism design with transfers where agents' preferences need not be quasilinear. In such a model, (1) we characterize dominant strategy incentive compatible mechanisms using a monotonicity property; (2) we establish a revenue uniqueness result: for every dominant strategy implementable allocation rule, there is a unique payment rule that can implement it; and (3) we show that every dominant strategy incentive compatible, individually rational, and revenue-maximizing mechanism must charge zero payment for the worst alternative (outside option). These results are applicable in a wide variety of problems (single object auction, multiple object auction, public good provision etc.) under suitable richness of type space. In particular, our results are applicable to two important type spaces: (a) type space containing an arbitrarily small perturbation of quasilinear type space and (b) type space containing all positive income effect preferences.

Keywords: Incentive compatibility; individual rationality; monotonicity; non-quasilinear preferences; revenue equivalence (search for similar items in EconPapers)
JEL-codes: D40 D44 D80 (search for similar items in EconPapers)
Date: 2020-05-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Mechanism design without quasilinearity (2017)
Working Paper: Mechanism design without quasilinearity (2017)
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