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Balanced ranking mechanisms

Debasis Mishra () and Tridib Sharma ()
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Debasis Mishra: Indian Statistical Institute, Delhi
Tridib Sharma: ITAM, Mexico

Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers from Indian Statistical Institute, New Delhi, India

Abstract: In the private values single object auction model, we construct a satisfactory mechanism - a symmetric, dominant strategy incentive compatible, and budget-balanced mechanism. Our mechanism allocates the object to the highest valued agent with more than 99 probability provided there are at least 14 agents. It is also ex-post individually rational. We show that our mechanism is optimal in a restricted class of satisfactory ranking mechanisms. Since achieving efficiency through a dominant strategy incentive compatible and budget-balanced mechanism is impossible in this model, our results illustrate the limits of this impossibility.

Keywords: budget-balanced mechanisms; Green-Laffont mechanism; Pareto optimal mechanism (search for similar items in EconPapers)
JEL-codes: D82 D71 D02 (search for similar items in EconPapers)
Date: 2016-05
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