Auction Design with Interdependent Valuations: The Generalized Revelation Principle, Efficiency, Full Surplus Extraction and Information Acquisition

52 Pages Posted: 1 Apr 2003

See all articles by Claudio Mezzetti

Claudio Mezzetti

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: March 2003

Abstract

Agents' valuations are interdependent if they depend on the signals of all agents. Previous literature has claimed that with interdependent valuations and multidimensional, but independent, signals, efficient auction design is impossible. This paper shows that, on the contrary, it is always possible to find efficient auction mechanisms. Furthermore, it characterizes the conditions under which it is possible to extract the full surplus from the agents. Finally, it shows that it is also possible to provide agents with the incentives for the efficient, ex-ante acquisition of information. All these results rest on the application of a generalized version of the revelation principle, which requires that the designer uses two reporting stages.

Suggested Citation

Mezzetti, Claudio, Auction Design with Interdependent Valuations: The Generalized Revelation Principle, Efficiency, Full Surplus Extraction and Information Acquisition (March 2003). Available at SSRN: https://ssrn.com/abstract=389541 or http://dx.doi.org/10.2139/ssrn.389541

Claudio Mezzetti (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States
919-966-5377 (Phone)
919-966-4986 (Fax)

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