42 Pages Posted: 11 Sep 2017 Last revised: 17 Oct 2017
Date Written: October 13, 2017
Consider an extensive-form mechanism, run by an auctioneer who communicates sequentially and privately with agents. Suppose the auctioneer can make any deviation that no single agent can detect. We study the mechanisms such that it is incentive-compatible for the auctioneer not to deviate -- the credible mechanisms. Consider the ex post individually-rational optimal auctions. The first-price auction is the unique sealed-bid credible mechanism. The ascending auction is the unique strategy-proof credible mechanism.
Keywords: Mechanism Design, Auction, Credible, Strategy-Proof
JEL Classification: D44, D47, D82
Suggested Citation: Suggested Citation
Akbarpour, Mohammad and Li, Shengwu, Credible Mechanism Design (October 13, 2017). Available at SSRN: https://ssrn.com/abstract=3033208