Efficient Auctions and Interdependent Types

16 Pages Posted: 18 Jan 2012

See all articles by Dirk Bergemann

Dirk Bergemann

Yale University - Cowles Foundation - Department of Economics; Yale University - Cowles Foundation

Stephen Morris

Princeton University - Department of Economics

Satoru Takahashi

National University of Singapore (NUS) - Department of Economics

Date Written: January 18, 2012

Abstract

We consider the efficient allocation of a single good with interdependent values in a quasi-linear environment. We present an approach to modelling interdependent preferences distinguishing between "payoff types" and "belief types" and report a characterization of when the efficient allocation can be partially Bayesian implemented on a finite type space. The characterization can be used to unify a number of sufficient conditions for efficient partial implementation in this classical auction setting.

We report how a canonical language for discussing interdependent types -- developed in a more general setting by Bergemann, Morris and Takahashi (2011) -- applies in this setting and note by example that this canonical language will not allow us to distinguish some types in the payoff type -- belief type language.

Keywords: Mechanism Design, Robust mechanism design, Efficient auctions, Interdepedent types, Partial implementation, Full implementation

JEL Classification: C79, D82

Suggested Citation

Bergemann, Dirk and Morris, Stephen Edward and Takahashi, Satoru, Efficient Auctions and Interdependent Types (January 18, 2012). Cowles Foundation Discussion Paper No. 1846; Economic Theory Center Working Paper No. 30-2012. Available at SSRN: https://ssrn.com/abstract=1987580 or http://dx.doi.org/10.2139/ssrn.1987580

Dirk Bergemann (Contact Author)

Yale University - Cowles Foundation - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States
203-432-3592 (Phone)
203-432-2128 (Fax)

HOME PAGE: http://www.econ.yale.edu/~dirk/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Stephen Edward Morris

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

Satoru Takahashi

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

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