Non-Clairvoyant Dynamic Mechanism Design
65 Pages Posted: 23 Nov 2016 Last revised: 5 Oct 2020
Date Written: June 5, 2020
We introduce a new family of dynamic mechanisms that restricts sellers from using future distributional knowledge. Since the allocation and pricing of each auction period do not depend on the type distributions of future periods, we call this family of dynamic mechanisms non-clairvoyant.
We develop a framework (bank account mechanisms) for characterizing, designing, and proving lower bounds for dynamic mechanisms (clairvoyant or non-clairvoyant). We use the same methods to compare the revenue extraction power of clairvoyant and non-clairvoyant dynamic mechanisms.
Keywords: Dynamic mechanism design, revenue optimization, non-clairvoyance.
JEL Classification: D44, C73, D82
Suggested Citation: Suggested Citation