59 Pages Posted: 11 Sep 2017 Last revised: 16 Jul 2018
Date Written: June 17, 2018
Consider an extensive-form mechanism, run by an auctioneer who communicates sequentially and privately with agents. Suppose the auctioneer can deviate from the rules provided that no single agent detects the deviation. A mechanism is credible if it is incentive-compatible for the auctioneer to follow the rules. We study the optimal auctions in which only winners pay, under symmetric independent private values. The first-price auction is the unique credible static mechanism. The ascending auction is the unique credible strategy-proof mechanism.
Keywords: Mechanism Design, Auction, Credible, Strategy-Proof
JEL Classification: D44, D47, D82
Suggested Citation: Suggested Citation