Implementation with Interdependent Valuations, Second Version

Richard McLean and Andrew Postlewaite

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: It is well-known that the ability of the Vickrey-Clarke-Groves (VCG) mechanism to implement efficient outcomes for private value choice problems does not extend to interdependent value problems. When an agent’s type affects other agents’ utilities, it may not be incentive compatible for him to truthfully reveal his type when faced with CGV payments. We show that when agents are informationally small, there exist small modifications to CGV that restore incentive compatibility. We further show that truthful revelation is an approximate ex post equilibrium. Lastly, we show that in replicated settings aggregate payments

Keywords: Auctions; Incentive Compatibility; Mechanism Design; Interdependent Values; Ex Post Incentive Compatibility (search for similar items in EconPapers)
JEL-codes: C70 D44 D60 D82 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2002-07-01, Revised 2013-01-28
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:13-005

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