A Note on Optimal Allocation Mechanisms

10 Pages Posted: 17 Apr 2008

See all articles by Vasiliki Skreta

Vasiliki Skreta

University of Texas at Austin - Department of Economics; University College London

Nicolas Figueroa

University of Minnesota - Twin Cities - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April, 2008

Abstract

This paper studies revenue-maximizing allocation mechanisms for multiple goods where the buyer's utility can depend non-linearly in his type. We point out that despite strictly increasing virtual utilities, the allocation rule obtained via pointwise optimization may fail to be increasing and thus it may violate incentive compatibility. More importantly, the revenue maximizing allocation may involve randomizations between di¤erent allocations.

Keywords: mechanism, design, optimal auctions, bunching

JEL Classification: C72, D44, D82

Suggested Citation

Skreta, Vasiliki and Figueroa, Nicolas, A Note on Optimal Allocation Mechanisms (April, 2008). Available at SSRN: https://ssrn.com/abstract=1120961 or http://dx.doi.org/10.2139/ssrn.1120961

Vasiliki Skreta (Contact Author)

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States

HOME PAGE: http://vskreta.wixsite.com/vskreta

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

HOME PAGE: http://vskreta.wixsite.com/vskreta

Nicolas Figueroa

University of Minnesota - Twin Cities - Department of Economics ( email )

271 19th Avenue South
Minneapolis, MN 55455
United States

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