Optimal Mechanism Design: Type-Independent Preference Orderings (Published in the Japanese Economic Review 69 (4), 2018.)

Hitoshi Matsushima

No CARF-F-357, CARF F-Series from Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo

Abstract: We investigate revenue maximization 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 satisfy strategy-proofness and ex-post individual rationality. 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 maximization problem in single-unit auctions can be applied to general allocation problems, where the incentive-constrained revenue maximization problem can be reduced to the simple maximization problem of the sum of players’ marginal revenues without imposing any incentive constraint.

Pages: 15 pages
Date: 2015-02
New Economics Papers: this item is included in nep-gth and nep-mic
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